HomeMy WebLinkAbout12-6958_ }
-- '
7 i. . { ~ ~„k h ~.. ~ t
~ ~ _.
.. ... a ,^ y 1 7
- t ~.7 (~ t
~r{
BIG SPRING SCHOOL DISTRICT
FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2012
~~ ~ I
a,,,r.E~~~-~P~
n~~- ~~~~
~~~~
TABLE OF CONTENTS
Page
Number
INDEPENDENT AUDITOR'S REPORT ' IAR - 1 to IAR - 2
MANAGEMENT'S DISCUSSION AND ANALYSIS MDA - 1 to MDA - 13
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 ~'~tatement of revenues, expenditures,
and changes in fund balances to the statement of activities FS - 6
Statement of net assets -proprietary funs 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 - 31
OTHER REQUIRED SUPPLEMENTARY INFOR~IAATION
Budgetary comparison information -general fund ORSI - 1
Other post employment benefit plans ORSI - 2
Greenawalt & Company, P.C.
James E. Lyons
CERTIFIED PUBLIC ACCOUNTANTS Deborah J. Kelly
Since Z 955 Scott J. Christ
v~ Ronald S. Morgan
Howard R. Greenawalt
Creedon R. Hoffman
INDEPENDENT AUDITOR'S REPORT
Board of School Directors
Big Spring School District
Newvitle, Pennsylvania
We have audited the accompanying financial st~'tements of the governmental activities, the business-type activities,
each major fund, and the fiduciary funds of Big spring School District as of and for the year ended June 30, 2012,
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'$ management. Our responsibility is to express opinions on these
financial statements based on our audit. The pricer year summarized comparative information has been derived from
the District's June 30, 2011 financial statements ~nd, in our report dated November 4, 2011 we expressed unqualified
opinions on the respective financial statements of the governmental activities, the business-type activities, each major
fund, and the fiduciary funds.
We conducted our audit in accordance with aud~ting standards generally accepted in the United States of America
and the standards applicable to financial aud~ts contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Thos,~e 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 the 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, tlhe business-type activities, each major fund, and the fiduciary funds
of Big Spring School District, as of June 30, 2p12, 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 October 25, 2012, 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, contacts, and grant agreements and other matters. The purpose of that
report is to describe the scope of our testing of infernal 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 iln 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 School Directors
Big Spring School District
Accounting principles generally accepted in the United States of America require that management's discussion and
analysis on pages MDA-1 through MDA-13 anq other required supplementary information on pages ORSI-1 and
ORSI-2 be presented to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Goverhmental Accounting Standards Board, who considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic,
or historical context. We have applied certain 1, limited procedures to the required supplementary information in
accordance with auditing standards generally ac~epted in the United States of America,. which consisted of inquiries
of management about the methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the b~sic financial statements, and other knowledge we obtained during
our audit of the basic financial statements. We dd not express an opinion or provide any assurance on the information
because the limited procedures do not provided, us with sufficient evidence to express an opinion or provide any
assurance.
.~~~~ , Vic.
GREENAWALT & COMPANY, P.C.
October 25, 2012
Mechanicsburg, Pennsylvania
lAR - 2
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2012
This discussion and analysis provides an overview of the District's financial performance for the year ended
June 2012. The report format is in accordance with GASB Statement No. 34, Basic Financial Statements -
and Management's Discussion and Analysis',- for State and Local Governments. Management's Discussion
and Analysis (MD&A) includes comparisons pf financial position at June 2012, 2011 and 2010. The MD&A
also includes comparisons of current year 'financial activities to the previous year. The 2011 and 2010
amounts have come from our prior year M~&A, and are otherwise not a part of the June 2012 financial
statements. Please read our discussion and analysis in conjunction with the District's financial statements,
which begin on page FS-1. To preserve readability, dollar amounts in comparative tables derived from the
financial statements are presented in millionis.
FINAINCIAL HIGHLIGHTS
Othr Supt Svc,
Centra I Svc 27'132 , 0%
$48,974, 0%
Stu Trans SvC \
s,
$2,405,809, 6%
Opn & Maint,
$3,471,510, 9%
Business, $381,867
,1%
Pupil Health,
$430,161, 1%
Admin, $2,176,606
,5%
Staff Svcs,
$1,353,914, 3% ~
Student Svcs,-~Hi
$930,098, 2%
2011/12 Spendimg By Program ($40,650,007 total)
Stu Act & Athletic,
$778,444, 2%
Interfund Xfer,
$1,545,360 , 4%
L Voc Ed, $626,2
they Instr~%
01,402 , 0%
M DA - 1
$15,914,800 , 39%
Community Svc,
$27,967, 0%
Special Ed,
$6,527,742, 16%
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2012
General Fund revenues for 2011-12 decreased less than 1% from $42,095,304 to $42,025,038 from 2010-
11; expenditures and transfers-out increased from $40,546,512 in 2010-11 to $40,650,007 in 2011-12 or
less than 1% from the prior year. The Disttrict added $1,375,031 to the fund balance for a total of
$5,893,014 as of June 30, 2012. The Board e~Cpects to transfer $1,100,000 to the Capital Project Fund and
assign an additional $275,000 to PSERS or ',other committed items. At that point the unassigned fund
balance will be $2,564,014 or 6.5% of the 20!12/13 Budget -within the 8% maximum required under state
law.
The revenue graphs at right show
the story of increasing dependence state
on local taxes and decreasing 3s%
subsidy support from the Federal
Dept. of Education. Local effort
continues to assume more of the
revenue pie; in 2006-07 it was 539'0
of revenues as it was in 2009-10,
55% in 2010-11 and 589'o in 2011-12.
I 2010 11 h F d I f
2012 Funding Sources
Federa I
1%
n - t o a era portion o Other Local
total revenue was 69'o due to 3%
American Recovery and
Reinvestment Act (ARRA) funding In 5-year History of Funding Sources
Local Taxes
58%
2011-12, Federal revenue dipped to 30,000,000 - - - -- -- - - -- - -- ----
only 19'0 of revenues as ARRA funding
__
disappeared. Reversing recent zs,oob,ooo - - - Local Taxes __ __ _
trends, the Commonwealth's share
increased from 369'o in 2010-11 to zo,oob,ooo
389'o in 2011-12 principally due to ..~... ,~ state
the Commonwealth's contributions is,ooo,ooo -
to the cost of PSERS retirement.
io,ooc~,ooo
Going forward, this creates a
challenge for the district as the
5,000,000
Commonwealth is indicating level other focal
funding of both Regular and Special o _ _- FP~~ai
Programs for the foreseeable future zoo6-o~ zoos-os zoos/o9 zoo9/io zoio/ii zoii/iz
as they struggle to meet their
obligation for their 509'0 share of the PSERS contributions.
The economy's impact on the District remains uncertain. Investment earnings continue to be almost non-
existent compared to 2008 levels. The District collected $4.26 million of EIT taxes in 2009-10, $4.61 million
in 2010-11 and $4.79 million in 2011-12. Wnfortunately, the District faces an uncertain future for EIT
MDA-2
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2012
revenue due to the implementation of Act 32. Initial estimates for 2011-12 were to expect a 10-250
reduction in EIT due to Act 32 implementation whereas the actual amount increased by 49'0 over 2010-11.
The Capital Reserve Fund ending balance vWas $2,325,263 for 2009-10 and $3,279,685 for 2010-11. The
District added $1,432,564 for 2011-12 but also spent $251,274 on a kitchen expansion at Mt. Rock, various
building repairs and technology infrastructure upgrades. The ending balance for 2011-12 was $4,460,975.
The District self-funds its healthcare using the South Central Trust (SCT). This year, as well as last, was a
relatively expensive year with several high dollar claims that hit the stop loss limit. Due to the high claims
experience, the District balance SCT decreased by $500,000 to a June 30, 2012 accrual of $250,000 to pay
projected expense at June 30, 2012.
In December 2009 the Board approved bids for the expansion and renovation at Newville totaling
$2,774,334 while it considered replacing Plainfield with a new building. In June 2010 the Board decided to
stop the Plainfield planning process and add'two more classrooms to the Newville project. It then directed
the administration to develop an elementary school reconfiguration plan to support the closure of
Plainfield. Plainfield closed in June 2011 and sat dormant for 2011-12. In June 2012 the Board arranged
for Yellow Breeches, an alternative education provider, to lease Plainfield for the 2012/13 year.
In July 2011 the District sold $9,800,000 in bonds that refinanced the existing 2006 bonds with cone-time
savings of $404,000 on debt service for the 2011-12 year. In April of 2012 the Administration began to
work with financial advisors to restructure existing debt with two refinancings, a payoff of the ESCO debt
for geothermal systems and extend debt service by one year through 2023 to help offset the cost of PSERS.
The District continues under the restrictions of Act 1 of the Special Session of 2006 which limits future
increases in the District's real estate taxes and displaces a selected amount of local real estate taxes with
gaming funds. The District was allotted $770,065 in gaming funds for 2011-12 compared with $770,380 in
2010-11; these funds were distributed in an equal amount to each qualified taxpayer of $130.66 per
homestead/farmstead.
In November 2010 Act 120 reformed the PA State Employees Retirement System (PSERS) by implementing
steep increases in employer contributions. In 2010 Cumberland County underwent reassessment
increasing Big Spring's total assessed value from $1,171,821,730 to $1,617,543,400 and reducing the base
millage to 11.655. In preparing the 2011-12 budget, the reassessment allowed the District to retain the
same 3.8% index as the prior year raising the millage to 12.098 in order to help offset the first year of big
PSERS increases. In June 2012, the Board raised millage the allowed 2.29'o index to 12.364 to balance the
budget.
MDA-3
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2012
The first chart at right shows the Wages v. Benefits
competition between wages and szo,ooo,ooo ----------.---- ---------
benefits for the budget dollar. Due to s'a8,ooo,ooo
the quickly rising cost of retirement s~6,oo0,000 --- - -- -- -- - - - -
contributions and healthcare, over the s14,oo0,000 - -- -- _ _ _
past two years the District furloughed 5'2,°°0,000 ---.--
Sxo,ooo,ooo ------
people in both the professional and 58,000,000 ------
support staffs in order to contain 56,000,000 -___.__ __----___--------_-.-._ __--.- ---__-.-
budget expenses for personnel. Sa,ooo,ooo -- - - - -
$2,000,000 -- --
In the second chart, the steep rise in 5_
PSERS retirement contributions is 20oa/OS 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
unremarkable as increases of this
magnitude will continue until 2016.
With a corresponding increase in
healthcare and continued pressure on
wages, it is not apparent how the
District, or other subsidy dependent
School Districts in Pennsylvania, will
survive when paying more than 269'0 of
payroll into PSERS at least through
2035.
This District is also squeezed by the
continuously increasing cost of Special
Education services. Since 2006/07 the
cost of Regular Education Program has
increased by 119'o while the Special
Program has gone up by 479'0. It
increased 10% from 2010-11 to 2011-
12. The District struggles with
increasing demands from parents,
widening mandates from both the state
and federal level that contrasts with flat
funding from the Commonwealth and
declining support from the Federal IDEA
program.
Retirement
53,500,000 -;--
53,000,000
52,soo,ooo
S2,ooo,ooo
51,soo,ooo
51,oao,ooo
5500,000
Regular Program v. Special Program
S1s,ooo,ooo
$16,000,000
$14,000,000
51z,ooo,ooo
S1o,oo0,000
Ss,ooo,ooo
$6,000,000
Sa,ooo,ooo
Sz,ooo,ooo
S-
MDA-4
2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/112011/12 2012/13 2013/14
~~\O`i O~~O~O O~\O'~ 0~1\O~ O~~O°~ O~\,y0 p'yO\'yti p'1~\ti'L
ti ti ti ti ti ti ti ti
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2012
USING THESE FINANCIAL STATEMENTS
This report contains a series of financial statements. The Statement of Net Assets and the Statement of
Activities are on pages FS-1 and FS-2. These 'statements provide information about the District as a whole,
and present alonger-term view of District finances than fund financial statements. Fund financial
statements are on pages FS-3, FS-5 and FS-7'through FS-10. For governmental funds, the statements show
how District services have been financed in the short term, as well as the amount remaining for future
spending. Proprietary funds statements provide information about non-governmental operations, in this
case food service. The fiduciary funds statement reports amounts held in trust by the District for student
activities.
Page FS-4 reconciles total governmental fund balances to total net assets of governmental activities. Page
FS-6 reconciles the total net change in governmental fund balances to the change in net assets of
governmental activities.
District-wide Financial Statements
District-wide 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 included with all other assets. Long-term debt is included 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 Reserve.
In the district-wide statements, the approach to measurement of revenues and expenses is similar to that
used in the private sector and is referred to as the accrual basis of accounting. This is disclosed further in
the notes to financial statements.
Fund Financial Statements
Fund statements provide financial information about the District's funds rather than the District as a
whole. There are three types of funds, Governmental, Proprietary and Fiduciary. The use of each type of
fund is disclosed in the notes to financial statements. Unlike district-wide statements that report revenues
on the accrual basis, the fund statements report revenues only to the extent cash has been received, or is
expected to be received in the near future.
MDA-5
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2012
Statement of Net Assets
THE DISTRICT AS A WHOLE
Total net assets were $29,217,362 at June 3d, 2012, $26,607,131 at June 30, 2011 and $23,616,384 at June
30, 2010. This is an increase of $2,610,231 from June 2011 and $2,990,747 from June 2010. The following
summarizes the Statement of Net Assets (page FS-1).
Current and other assets
Capital assets
Total assets
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
Govermmental Business-type
Activities Activities Totals
2012 011 2010 2012 2011 2010 2012 2011 2010
$17.0 $14.8 $10.0 $ 0.3 $ 0.3 $ 0.3 $17.4 $15.1 $10.3
52.6 53.8 52.5 0.5 0.5 0.6 53.1 54.3 53.1
$69.6 $68.6 $62.5 $ 0.8 $ 0.8 $ 0.9 $70.5 $69.4 $63.4
$ 4.1 $ 6.7 $ 7.2 $ - $ - $ 0.1 $ 4.1 $ 6.7 $ 7.3
37.1 36.0 32.5 - - - 37.1 36.0 32.5
41.2 42.8 39.7 - - 0.1 41.2 42.8 39.8
17.2 16.0 17.6 0.5 0.5 0.6 17.7 16.5 18.2
0.5 1.1 - - - - 0.5 1.1 -
10.6 8.7 5.2 0.3 0.3 0.2 10.9 9.0 5.4
28.4 25.8 22.8 0.8 0.8 0.8 29.2 26.6 23.6
$69.6 $68.6 $62.5 $ 0.8 $ 0.8 $ 0.9 $70.4 $69.4 $63.4
Net assets are the difference between assets and liabilities, and represent resources that can be used to
pay for future operations and capital improvements. The majority of our total 2012 net assets,
$17,743,365 out of $29,217,362, are invested in capital assets (net of related debt).
MDA-6
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2012
Statement of Activities
The following summarizes the Statement of Activities (page FS-2). It shows that total net assets increased
by $2,610,231 during 2012 and $2,990,747 dluring 2011.
Program revenues
Charges for services
Operating grants and contributions
Capital grants and contributions
General revenues
Taxes
Earnings on investments
State general subsidies
Total revenues
Direct expenses
Excess revenues (expenses)
before transfers
Transfers between activities
Change in net assets
Governmental Business-type
Activities Activities Totals
2012 011 2010 2012 2011 2010 2012 2011 2010
$ 0.5 $ 0.4 $ 0.4 $ 0.7 $ 0.8 $ 0.8 $ 1.2 $ 1.2 $ 1.2
6.6 8.8 8.3 0.5 0.5 0.6 7.1 9.4 8.9
0.9 0.8 1.5 - - - 0.9 0.8 1.5
23.9 23.1 22.1 - - - 23.9 23.1 22.1
9.6 8.7 8.9 - - - 9.6 8.7 8.9
41.4 41.8 41.2 1.2 1.3 1.4 42.7 43.2 42.6
38.8 38.8 37.9 1.3 1.4 1.4 40.1 40.2 39.3
2.7 3.0 3.3 (0.1) (0.1) - 2.6 3.0 3.3
(0.1) - - 0.1 - - - - -
$ 2.6 $ 3.0 $ 3.3 $ - $ - $ - $ 2.6 $ 3.0 $ 3.3
The change in net assets is the difference between revenues and expenses using the accrual basis of
accounting.
MDA-7
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2012
The following summarizes expense information from the Statement of Activities (page FS-2). Direct
expenses represents the actual cost of providing the services while the net expense represents the amount
of cost that is not recovered through program revenues, meaning user charges, grants and contributions.
The net expense must be recovered through general revenues, primarily taxes and state general subsidies.
Amounts not recovered reduce funds available for future years.
Di
Instruction
Instructional student support
Admin and financial support
Opn and maintenance of plant
Pupil transportation
Student activities
Community services
Interest onlong-term debt
General Fund
Transfers to business-type activities
Total governmental activities
State general subsidies revenues
Gove
2012 2pi1 2010
$ 24.8 $ 2A.4 $ 23.2
2.9 2.8 2.9
2.9 2.9 3.1
3.6 4.0 4.1
2.4 2.4 2.3
0.8 0.8 0.8
1.3 1.5 1.5
$ 38.7 $ 3$.8 $ 37.9
Program
Revenues
2012 2011 2010
$ 4.8 $ 7.1 $ 6.6
0.2 0.2 0.2
0.1 0.1 0.1
0.1 0.1 0.1
1.7 1.5 1.6
0.1 0.1 0.1
0.9 0.8 1.5
$ 7.9 $ 10.0 $ 10.2
Net
Expense
2012 2011 2010
$ 20.1 $ 17.2 $ 16.6
2.7 2.6 2.7
2.7 2.8 3.0
3.5 3.9 4.0
0.7 0.9 0.7
0.7 0.7 0.7
0.4 0.7 -
30.8 28.8 27.7
0.1 - -
30.9 28.8 27.7
9.6 8.7 8.9
Total needs from taxes and other local sources
$ 21.4 $ 20.1 $ 18.8
Business-type Activities
Direct Program Net
Expenses Revenues Expense
2012 2 11 2010 2012 2011 2010 2012 2011 2010
Food Service $ 1.3 $ 1~.4 $ 1.4 $ 1.2 $ 1.4 $ 1.4
Transfers from governmental activities
$ 0.1 $ - $ -
(0.1) - -
$ - $ - $ -
MDA - 8
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2012
TH6 DISTRICT'S FUNDS
Governmental Fund Balances
2011-12 2010-11
2012 2011 2010 Chanee Chance
General fund -nonspendable
General fund -committed
General fund -unassigned
Capital reserve fund -committed
Capital projects fund -restricted
Governmental fund balances
2.0 0.6 0.6 1.4 -
3.9 3.7 2.1 0.2 1.6
4.5 3.2 2.3 1.3 0.9
0.5 1.1 (1.4) (0.6) 2.5
$ 10.9 $ 8.9 $ 3.9 $ 2.0 $ 5.0
Total restricted+nonspendable 0.5 1.4 (1.1) (0.9) $ 2.5
Total committed 6.5 3.8 2.9 2.7 $ 0 9
Total unassigned 3.9 3.7 2.1 0.2 1.6
Total governmental funds $ 10.9 $ 8.9 $ 3.9 $ 2.0 $ 5.0
Governmental Funds -fund balances
Changes from 2011 to 2012
As of June 30, 2012 the District's reserve accounts again increased with the general fund balance going
from $4,517,983 in 2011 to $5,893,014 in 2012. The District expects to assign an additional $1,375,031 of
the general fund balance to fund healthca-1e and capital projects. The capital reserve fund had a net
increase of $1,181,290 to end at $4,460,975.' The District self-funds its health insurance plans through the
South Central Trust and ended the year with $1,062,156 in the trust prior to audit. Due to some high
experience claims, the Trust went from $250'V000 in prepaid expense in 2011 to an accrual of $250,000 to
pay projected expenses at June 30, 2012.
Changes from 2010 to 2011 (Previous Year)
At June 30, 2011 the District's reserve accbunts increased with the general fund balance going from
$2,969,191 to $4,517,983 with $554,000 coMmitted to PSERS and an additional $1,400,000 assigned after
June 30, 2011 to support technology, special education and PSERS. The capital reserve fund increased from
$2,325,263 on June 30, 2010 to $3,279,685 as of June 30, 2011.
MDA-9
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2012
Changes from 2009 to 2010 (2 years ago)
The negative fund balance in the Capital Prgjects Fund as of June 30, 2010 was due to not borrowing funds
until construction payments were due. 1`he $3,500,000 draw-down non-revolving line-of-credit was
accessed as needed until permanent financing was obtained in October 2010.
General Fund Budget
The following summarizes the budgetary comparison information presented on page ORSI-1, along with
comparisons to the previous year.
Total revenues
Total expenditures
Excess revenues (expenditures)
Final Budget
2012 201 2010
$ 40.5 $ 41.0 $ 40.0
39.7 39.6 37.5
0.8 1.4 2.5
Actual Amount
2012 2011 2010
$ 42.0 $ 42.1 $ 40.9
39.1 39.2 37.3
2.9 2.9 3.6
Variance
2012 2011 2010
$ 1.5 $ 1.1 $ 0.9
0.6 0.4 0.2
2.1 1.5 1.1
Other financing sources (uses) (0.8) (1.4~ (2.5) (1.5) (1.4) (2.8) (0.7) - (0.3)
Net change in fund balance $ - $ - $ - $ 1.4 $ 1.5 $ 0.8 $ 1.4 $ 1.5 $ 0.8
In 2012, actual revenues exceeded the final' budgeted amount (including transfers) by $1,375,031. Actual
expenditures were $377,412 under the original budgeted amount, and transfers to other funds were
$898,716 over the original budgeted amount.
CAPITAL ASSETS
During 2012, the District spent $0.8 million on capital assets, which included almost $0.5 million for Oak
Flat roofing project. The Newville Elementary roof project will be completed in August 2012 at a cost of
$0.6 million split between the capital project!fund and the capital reserve fund.
In December 2009 the Board approved a project adding a 2-story 6-classroom addition to Newville to
relieve the overcrowding. It accepted bids ih January and awarded those bids in February 2010 with an
expected completion of November 2010. Because of the economy and falling enrollment, the Plainfield
project was first reduced in scope and finally cancelled in June 2010. At that time, the Board decided to
add two classrooms to the Newville project bringing the total cost to $3.8 million. The project was
substantially complete by the end of Novelmber 2010 and was fully occupied at that time. Plainfield
Elementary closed in June 2011.
MDA - 10
BI,G SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2012
Capital assets (net of depreciation)
2011-12 2010-11
2012 2011 2010 Change Change
Governmental activities
Land $ 1.0 ', $ 1.0 $ 0.5
Construction in progress - - 1.3
Buildings and Improvemerr 49.9 ' 51.1 49.0
Furniture and equipment 1.0 ' 1.0 1.2
Library books 0.2 ', 0.2 0.2
Computer equipment 0.5 ' 0.5 0.3
~~ ~ 5
~
Business-type activities
Furniture and equipment $ 0.5 ' $ 0.5 $ 0.6
$ - $ 0.5
- (1.3)
(1.2) 2.1
- (0.2)
- 0.2
?) ~~
$ - $ (0.1)
Capital assets in the governmental activities were $52,597,119 and $53,822,917 at June 2012 and 2011,
respectively. The District purchased capital assets totaling $814,931 and $3,276,624 for the years ended
June 2012 and 2011, respectively. The District had depreciation expense of $2,040,729 and $1,970,574 for
the years ended June 2012 and 2011, respectively.
LONE-TERM LIABILITIES
The following summarizes the long-term liabilities note to financial statements (starting at page FS-22).
Most of the debt is general obligation bonds issued to pay for capital improvements. The District's ability
to raise future funds through the issuance' of debt depends on how existing bonds are rated by the
investment community. In October 2012 Starydard & Poor upgraded the District's bond rating from A+ with
stable outlook to AA- with stable outlook for the 2012 series of general obligation bonds.
2011-12 2010-11
2012 2011 2010 Chanee Chanee
Governmental activities
General obligation bonds and notes $ 35.7 $ 38.3 $ 35.3 $ (2.6) $ 3.0
Compensated absences 0.7 0.7 0.7 -
Other post employment benefits 0.5 0.4 0.3 0.1 0.1
Unamortized bond costs (0.6) (0.5) (0.4) (0.1) (0.1)
Total liabilities ~; $ 36.3 $ 38.9 $ 35.9 $ (2.6) $ 3.0
During 2010-11 the District borrowed $2,150000 on its 2010 short-term note, and issued its 2010 bonds
for $9,240,000. In July 2011 the District sold $9,800,000 in bonds that refinanced the existing 2006 bonds
with cone-time savings of $404,000 on debt service for the 2011-12 year.
M DA - 11
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2012
Each year the District pays interest on the debt and a portion of the outstanding bonds and notes, referred
to as redemption. During 2010-11 the District made regularly scheduled redemptions of $2,712,720 and
also repaid the 2010 short-term note of $2,39,811. During 2011-12 the District made regularly scheduled
redemptions of $2,730,640.
Beginning in 2009 is the inclusion of other pest employment benefits (OPEB) in our reporting process. This
primarily has to do with purchasing discounted health insurance after retirement through the District. The
District's July 2008 actuarial accrued liability of $3,995,512 is being amortized over a period of 30 years.
Additional OPEB detail is available starting a~ page FS-24/27 of the notes.
NEXT YEAR'S BUDGET AND OTHER FACTORS
Original Budget
2012-13 2011-12 Change
Total revenue $ 41.2 $ 40.3 $ 0.9
Total expenditures and other uses 41.2 40.3 $ 0.9
Excess revenues (expenditures) $ - $ _ $ _
The Big Spring School District is committed tp maintaining a strong educational program for students while
minimizing the burden on taxpayers. For 202-13, the District was forced to furlough eleven professional
staff plus an equal number of support staff, dontract out cafeteria services and raise taxes by 2.29'o in order
to balance the budget against skyrocketing host of retirement contributions and medical care. This year,
the District approved a $41.2 million budget to cover the increasing cost of benefits. The Commonwealth is
struggling with the cost of retirement contributions also and is not raising our subsidies as a result. The
American Recovery and Reinvestment Act f~nding is gone and federal support is now declining year-to-
year. In addition, the District continues to ebcpand services for special needs students without additional
state or federal funding. Despite the many clhallenges of a difficult economy, the district stands committed
to ensuring the best opportunities for stude~hts. While the 2012-2013 budget protects essential programs
and services, the District continues to look fob reductions and efficiencies at every level.
The revenue budget for 2012-13 of $41,238;893 represents a 2.4% increase over the 2011-12 budget of
$40,288,703. The real estate millage increased from 12.098 to 12.364 or 2.2% as limited by the Act 1 index.
The earned income tax rate remains at 1.65~o'F
MDA-12
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2012
The 2012-13 expenditure budget of $41,28,893 is a 2.49'o increase over 2011-12 budget of $40,288,703.
The major drivers of the 2012-13 budget a e the 3% wage increase for CBA salaries, 29'o for administrative
and support staffs and the PSERS contribution rate increased from 8.659'o to 12.36% of payroll or 439'x.
In reviewing its capital needs during the s ring of 2012, the District began to discuss the replacement of
the Middle School windows. The Building a d Property Committee recommended the project be approved
for design specification and the Board appr ved on September 17, 2012 at an estimated cost of $1 million
if the Board decides to fund the entire project.
August 2012 the District authorized the issu nce of Bonds in the amount up to $18,455,000 in one or more
series during the 2012 and 2013 calendar ears. The purpose of the Bonds is to refund/restructure the
District's outstanding 2003 Bonds and to fi ante debt for energy savings projects. Overall, the District will
save on average $397,000 ($302,000 Net o State Reimbursement) annually over the next nine years. The
District adds one more year of debt service i 2023.
Looking past the 2012-13 budget, PSERS contributions remain the single biggest challenge as shown below.
BSSD PSERS (net)
Sa,ooo,000
$ 3,500,000
$ 3,000,000
$ 2,500,000
$ 2,000,000
$1,500,000
$1,000,000
$ 500,000
$-
~y'L ,yQ ,y~o ,y~ O ,y'L ,La ti~ ti~ ,50 .,~'L ,~R
y'y .y3 tih y1' ,y ~ti .y~ '~ 'L~ .y~' ~ti ~''
,ti0 ,LO ,LO ,y0 ,ti0 ,ti0 .10 ,ti0 ,ti0 ,LO ,y0 ,LO
CONTACTING THE DISTRICT FINANCIAL MANAGEMENT
The District's financial report is intended to I rovide the readers with a general overview of the District's
finances and to show the Board's accountabi ity for the money it receives. If you have questions about this
report or wish to request additional financi I information, please contact the district office of Big Spring
School District, 45 Mount Rock Road, Newvill~, PA 17241, (717) 776-2000.
MDA - 13
to
tC
O
F-
d• ' O' 00 r CO 0 0 d' [f CO M N~ M O O O 1~ CON O to I~ r M
CO O N~ 00 O r h N a0 N ~ 00 N r 0 ~' r M CA ch f~ r M N
~ O tt)MOOCOCO00r CO OOOO~O COOtY'~ MctMr O
r '7 to ~~OO~~ CO 00 f` 00OIAOO NCO~O ~ ~OOt~ h
r N I~ ~~N OOH--00M O COQ COchO MOCOO NN~O O
N O ~ '~ N N Q O M ~ O r M M O O Lf) r (~ O ~
tl0 N N r- C'7 O N M CO N CO ~ CC) O O
O CD M ~h •- N CO
Efl ' EF} ER fR
O O O ' N ti r ' OO <
r O O MCA CO O ~
'd• 0 0 ti 00 ~ N I
N O tf) ~ ~ O 'd• ~ 1
Mr
O ~NO O CO
N M 00 N N
b4
a O ' ' 00(OOr
O ' '
w ~ M ~ ~ M t
f7
y ~ O O ~ O ~'
~ •> cCb ~ r
C
U
_
fA Q
7
r m ~
r
O
N
O f0 OO O tt)tO0 ' ' CC) t
~ ch C N ~0 0 ~CO~ N P
V C ~ .~ O LA ~ to 00 N O) ~
~ ~ C >
L O>O
M N CO
O CAMM
O Ot
tO ~
y W O j Q C7 O N N
Q Q
J N ~
•~ (~ b9
Owo E
OZN o
M C
O
~ ~ W Ctl
Z Z C
~ W ~
Z ~ N
c
~ ~ ~
~
N rn
~
(A
(n 'C
~ O
Q
m ~ N
(n Q
L ~
U
w
.~ ~
~ ~
m N
E
O
U ~
~
c ~
o ~
U ca
w ;
C
3 C
°'
o w ~
N
C
~
N
p
N
~
p
U ~
> ~'+ ` N L
N
~ N
N ~ N~ y C U
to N C) N L L y .~
~ ~
U
.~ C ~
N rL-. >
• _
ftS U ~i
C
p U ~ O
~ N
L ~ y 'C p~.
L p~
C ~ O
L N
rn (U y
X C
~ C
y CU t N t6 C '~
~ iu
~U ~ I~ 5o0 ~ a~_
w
Q
~~ tO O M CO N N O N M CA ~ tt) N O N CA
i N CA d• N N h~ 0 00 N r O CO ~t ~ CO ~t
• 00 M O Ch O N 00 OO O~ M ~ M~ N M aD
i COO 0p O W N ('M M r I~ lO r C7 r N I~ CO
1 00 O ~ O f0 ~ N M ~ 'd' ~ M ~ ~F M r 'cr
I (A r ~ CO O M tf) M N N 1~ ~ O N ~
N O N MM r 1~ 0 0 O
tC) I~• M ~ r r N f~
' r f~ 1~ ' M d' ' t0 ' ' O ' 0 ~ ~
O N ~ O CO ~ I~ O -C> tC') N
r to N r N N 00 r O O O
O O .-- 1~• ~ O d) r r O
N r r M 0 ~
~ O
O rt 0
0
69 4R EA
' ~ ~ N CO O O 00 O CO M CA I~ ~ N O ~ N
i N 0 N CO N CO f~ O M N r- r CO tt CA O N
• Op N O O~ r ~ CO ~~ M CO N f~ N M W
i Cfl O I~ CA ~ ~ tp M O h to r ~ r 0 CO I~•
i OO r N OO CO 1~ M ~~ lt) r ~~ M r N
i 0 t0 CO tO O M O M N N N~ CO ~h (fl
N M M ~ ~
~ CO ~ N CO
Ei? fH 69
C
O
.
~
•
U
N
t2
CU
.p
a
a~
m ~'
_
~ N
j U
U ~ ~
~ ~ a
o w ~
v m ~ m
1 °: .Ci N ~ N rn
1 U N l0 03 p N
m >, rn ~, N
m
la•~
1 p N ~
•p a ~c
fO p ~~
v (~
j C '~ 03 O
~ ~. C '~ N Q ~
1~ p~ y t6 O
CU
~ N N
f0 ~ w ftS
C
1 N
~ y
I
N y
y T j, N
N L O N .D
~ O N~~ f0 ~
d ~
CU
aivi m CC
N
ac > O) .
~~ C p N t6
E~-
~ C) O -p
5a~~ _
f0 Ctl
i
CO
O _
~„ N N
C U- ~
-d `
p N p _
O f0
>' C E O •
CU _U t6
V~ O _
N
O
• •.~_+ •.O_. ~ 3 ~ O
` ~ p i p N 03 F- ~
~ to 'C to H F-
i a a ~ ~ C >
, a? ci o ~ ~~ ~> a
`
i U U
=
Q U d
~ Q ~ i
c
~ ~~~
.~ m
-1 Z
r
W
V' O <D ~ M to OD N O CO ~ Ln ~ n ~ to ~ a0 M
r O N ~ f0 O N M CO N
~ O M~ r~ M n CO n M
~ ~ ~- N
CO (O Op ~ ~ O O O (D O ~ r' ~- O (O n
_
O n N N ~ O N OD O 00 r M O O
p N CO 00 OD GO ~ v t0 n ao O M r~ n ao O CO O
N N N M N ~~ M N
N v N M N N
N
N O) ~ fA
¢ ~
N
~
Z
O) (O O) (O ~ ~ ~ ~
O
CO
CO
~ M N O N n '
n
N
c _
f0 n M 0 n O n n st d1 A N N O M M CO
•- M O fD M t0 00 O a r O) O c0 N a n 00 N M N M
~ N
N to ~ O O C~ n
~ N ao ~ (p M N~ N O O n n
C O _
~ (O N n N N N
O (O n v n v ~
~ N
a0 O N
O O OO n N M~
a0 N r O ~ M
~ _
O O
tD
N
~p N ' O N N M O O O [t O M N (O O)
N M M M N N
U
~ ~ ~
f6
O)
O d
C
~ ~ ~ ~ ~
<D
CO
n
aD
N
by
n
>. U) O O Ct ~ 07 O O lf)
j i N O O) O O) O O O
O) uJ ~" CO O M ~ ~ ~
~ ~ ~
¢ n ao
.-.
r N ~
~ m ~ b9
r
O X
~J,J
_
-
N _ O~ CO ~ CO to I~ e!
~ O O .
~ M N m ~ n . O) O CO ~
O w
O C fn
Z (O ~ n M 0
M O CO M to 00 O~ n
~ n
r CO N~~~ N~ M M
r f0
r M
M O) N
~ '-' O H O d) ~ Ln n to
1A CO N n N N CO M N~ N O M n to O
~
C
c > N N N
O CO n ~ v ~ `a' N
OD N
00 COO n N M tf) r
O N r O ~ r
~ O
tfy N
00 r
~
U N
~~ M M a0 ~7 O v N
~ >
¢ N
.. M N N
O
~
~ ~ ~
V
c
w ~ f6 i i ~ ~ ~ i B O
M O
M i O
M
(n O N y~
~ N } •Q
C 6) of Oi
~ O
~ p O 0
O
J F-Mw 03
~U o
O o
D o
0
0 Q Z O
~
~
~
cs~ ~
~~ ~
_
'
O ~'U m
~
~
• N w
~
V
0 ~ C CO OD t17 O ~ CO M ' O to ~ ,D
~
(/~ Z W ~ j ~ C M ONO CO ~ N O ~ OV to ~ C
W ~ 0
O) .N.. '-
O N E 00 n
t0
~
O (6
~
,~
Z~ W C~
~ O cf M O 00 M O N
~ f`0 N ~ N r (O to tf) r N 7
F- ~ -
~ ~ ~ Q ~ ~ CO n h C N
N O)
_
¢ ¢ ,
a. ~ W U ~
O ~ b9 N
~ ~ ~ .~. ~
>- ~
~ a N
N
v, a>
'n
C uJ X O N j~
~
~ 03 N .C ~
V ~ ~. p i i O ~~ i i ~ ~ O j ~ X c
N C ~ O) 'O
m ~ " y M M l~ N r C~7 ~ f0 C `~ R C
X O N O
O O)
c ~ O)
N
N ul
p) ~~ ONO N n OND N O ~ N y 0~~ N t6 •c
N
N
~
~
L~ M ~ n N ~ C O O) C O i
(O O
F- td
) N N
_
f` ~ ~. L C w-
_ ~ O)
N
0
uJ
N
~ U ~ ~ ~ m~wd0 OS f6 ~ m m m
F- W (n ~
fn C~ 1- U Z Z
L ~nvvvrnaonv ~n v rn
O
O
O
N ~
M~~ N M ~
U O
D
O
D t O
C
~
O
M
M
O
~
N N
O
~
M
O) O
i O
O Q
D (
O
D
D
_
D X- N N N M N r M O
W ~
69 69
o ~ I
OS
a a ur
~ ~
° a~
~ ~'
d'V ~ ~
N V
OS
to
E O
~ C
~, ~ ~ a m
m
~ •~
O N N C OJ O U _N
7 f6 ~ l
N
~ E
C N
~ '6
d .~ Z
6 j O
N U ~>
> N O > U O
~~ C O
_
~
t6 m M U
~ 0)
O U L
U
V w + C
.
C C
C N
0 0 ~" ~
C O
d~
N
C ~ _
N ._
~
O~ (6 ~ N ~II
LL
E .
-.
U U C O C U O v! O
.
N y~~ d 7 O O 0)
~ ~¢Oa.igU ~ .N~
~
0 ,
C7 m
N
N
LL
O' 0 0 CO N O N LC) O~ M O ~ lC•) O M M O
O O E M I~ O 00 O r N r O f~ O O O ~ p
M O I~ r 0 0 d7 CO M N N O ~ (O O O r M
r ~- tC) ~ N ~' O ~ O M ~ N O I~ 07 [T M In I~
r N I~ ~ d' ~ CO f~ COO r ~ Cy ~ LCD r N M
O CA ~ ~ N CO r~ M N r N~ I~ O N
N O N N _
N N O ~ M M O ~
r
rn E!3 C~ EA C>r>
I4
r-.
O
~ f~- O O O COO ' (O f0 O CC) O ' N lC') O d' r O
tom- O O O O CO CO NCO I~ M ~ ~ O r M I~
M O O~ O~ O In r In M I~ O O O ~ O
N O to Ln Lt) 00 N C3) f~ ~ ~ ~ r O ~ CA to to
r OOOOMM ODO~st CO ~ CO1nM W CO
N O ti O O _ Cfl (~ 00 4O ~ ~ (~ p 00 ~
M O N N N r ~ ~ r- M O
r CO
r
0 0 1 O 1 1 I ~ 1 1 1 ~ I 1 ~ 1 1 ~ O
N r 0 O M M 1~ 1~ r
~~ r 0 O _ r• r O CA r
!_' I~ In O r r
O
O
N
C2 y ~ N O N N C
O C
O C
D
CO N ~ N ~ ~ ~ '~7
V ~ r r r - ~ ~ ~
~ ~ ~
r
0
N
C~ O 1 1 1 I 1 I ~ 1 1 ~ 1 N 1 1 I N
H Z M ~~ N O _ ~ ~ ti ti N
V ~ _ "_' ~ O O f~ ~ r r CA
W
~ ~
d 0 0
r ~ CO CO '~t
~ d'
~ O
CO
J U
~ W p ~~
J Z ~ ~ N
O
~ G O O
COO '
OOOOOao r 1 C3) CO CK) ' 1 ' O~ d' N
HO
O W N
0
m
O O O In CO t17 M COr~
O r tD ti
CO Or
O O r
O O
CO
~ O C N r 0 to ~ CD N f` ~ r O ~ O M M
(~ O M c
O V O CD O M M
CO CA O~ O CO I~ ~
CO O CD CD
~t ~ M
O CA O
CO I~
M
N (7 W CO ('~ r CO N v N N r M r M L[') r
? ~ ~ ~
Z W C
_ .
~
a ~ ~, I
~ W N i
~z ~ I
I
m J E ',
Q ~ _
m ~ N
t
~ N
~
I
_
CJ
... O
O
U ~
c
O I
L I
N I N
U
~ c
c N
~
~
CU _
CCI
~
O N
N
~ C ~ C
.
.
~ O
I ~ N ~ ~
I
O p a ~ U
, c c c i
fU to >,
N N 7
~ ~
•- N
N
a
,,,.
> ~~ ~ m I v fl- c a ~ c
~ ~•' ~ ~ ~ N aN. to N L ~"' ~ ~ fC1 N
L ~ O O N .C .Q ~ ~ ~ ~ y ~ '~ ~~., ~ Q ~-'
U +tn+ •~ 0 •" _j ~
U O N N c (C ~ ~ >
,~ Q Q- a~ CC1
- ~ .O
D Q
0 O C)
~ 7
w ~
,D c ~ .
ca .a
c ~
, a
0 N`
(p E~ 0 0~ .D c C U N a ~ N a 0- .C ~ ;a :6
N N tZ
'
m > ~ ~ ~ ~ y 0 +~ ~ O
m v c >, •~ to
c vi
E to
co
~
~
rn ~ :n
w m
a
M
LL.
r ~ ~ ~ O ~
1~ r O) ~ O M
tf) 1~ ~- O ~ t0
O O N r M r
OD ~ N c~") oO ~
O N I~ r 00
r ~ M N
b9 I ~
O O O O M O ' O O O
N O O O
O>
~ ~- OO f~ M
f~ N CO M ~ ~ ~ O r
In Ln OD M CO ~ I~ l[') r
Cp to 00 M to N to N
v'~ IM i I r
~~~
U
N
U
N
Z
a
m
W
W N
cn c
W
U ~ o~
I '~
°
Q N M ~
Q ~ N ', ~ O
.
m (n ~ ~ ~ "
fIJ W
~ ~ j M
o ' C X M
c
~
Z ~ °' ~
u3 ~ °
°
cn
~ Q
IL
o
° ~
m ._
~
c
°
~ ~ c
~
° °
~
W m ~ c v
i c ~ ~
~ Z N C tq ~ 0- I! ~ N • ~
Z LL r0
W O N ~
~ ~ N
w Q O
c
' ~
j ~ U
U~
~ F- N ~ N O ~- to
Z Z M ~ y 'O ~ ~ O ~0 0
~WW
W g
Z ~
co ~'~
-p m ~
~ v> ~ ~
~ >'N
co ...
W y +) ~ ~O c ~ o N
Q~' i N .
C~
W ~ v
i
`~ ~
N
N ~ N ~
~ I ~`~
~- O Lt
~ •~
_ ~ c
0 ~ V N
~ ~
~ 3 ~
~ W ~ Q' ~ ~ ! p 'y ~ C
~
~~ ~
° ~~ ~~
~ ' ~o ~,
z ~
~' ~
~
f°
~
~
o a
O O c
° -o
ca c i
~,
a
>, y a
i
m v~ .r
~ ~~ ~ m ~
I w
o o ° Q
J
~
~ ~ m
~
~I
~ ~
~ C
U N
m
r °' 7
° aci
I
m ~°
>
Z ~ ~' r N ~ N~ fQ
~
~
~
N
°~Q
'
~ 0
`
~
~ ~
.
~j i
a
~ .N f0 fA ~
U ~ c
o
~ ~ . ~
+
~
~ U O N N C ~
I ~ ~ C N .
~> N
N
~ ~ N N ~ w ~~ N f4
~ ~ p v~ '
~ ~ ~ ~
~ c N "
p~j
gy '~ ~
° N N ~
~ ?
U
C C
N (0
'v '= ~ C
N N _N
E ~ '
p
N ..+ m e C
N~ E
~ U
N C ~
C C ~ 'p C >, ~ O •' ~ ~ O ~ U ~ N ~
N > ~ p ~ N a. ~ T ~ O N
ai
~ `n fl ~ ~ x ~
. .
C7
~ rn w
o
~~E ~ a~ E
° N ~
c`~ - °~ °~
~~m
~
N
a
°~ m° sa~c
i i
a ~
~ N ~ ~ :~
c ~ ~ O ~ ~ ~ ~ N w ~ m ~ m c `~ C~
,
gy
Q
N _
~ a~ .~
N
N
~ ~
~ ~ C
lO N f0 N -
p J~
fl" ~ C
O C
~ O N
~ N
i p +
+
~ C O O .~+ U ~
C
° C
°O N
N ~ ~
~ Q ~° ~
. 'm c~o m ~ O Q ~ ~m m
~ ~~~ w a o
Q
U ~-
U
' xv
~
o Q m , UQ ~ m
m
H Q °
H
W
oONO~t V Nr-ON rep 0) ~ O~OIn O ~ M
N N o0 t~ O In O ~ '~ 1n 00 1~ 1~ O r O 1~ M O ~
In OI~O~ I~OtiM NI~~ M O~O~ ~ ~ r
COCOONf~ ~00f~N Mr00 r O(OOI~ `~ O to
r O M M N O O M O 1~ r r M ~ O O O d' O N N
r
O M~OMO (OiOf~r r (p lf)
v MI~•MM O O O
N N~ ~ NN N', ~ M 'a' N r v ~ ~ lf7 M 00
7 ~ r
y ~ d9
~_
O
(n
Q F" 00 O O O U7
~ r O N ~'' (O r In r' f~
M O
M 00 M N O r 00 M r
Z r
N O N OO M r N
O
O M ~t ~ N M O
O ~ N O~
(O r 0 0 00
In ~
r M
r.
~ MOCOMM NtOCflO O) ~ ~ I~NOM O tf) ~
LL N O O~ OO fO M I~ r 0 0 0 O N O Ln O r f~ N O
r lf7 r f~ In O r f~ 00 In 00 r O O 00 t(') f0 O O O
J N N r ~ ~ A M O
N ~ O~ ~ ~ r 00 O
~ I
~ r r
Z
W
~ EH
Z
W ~ i i ~ i ~ ~ 'i r i ~ ~ ' r
I r M N i i i i ~
Q r
O O 'i ~ 1M ~ ~ ~
U N U
~
'
~ ~
~
N
O
i
N~ I I
C)
O
~ r r v O O
W ~ !n O~
Z 7 ~ EA
N
Q ~
m
~ ~. ~ ~ ~
i I, ~ ' ~ ' ' O
~
' ' O CO
O
~
~
(,~
C
N M M ~ O O O f~ O M O O ti
~ W O O 00 In M N O~ N CO O
L
Z~ ~
O
'
f` I`
O
~
~
O _
~
I-
m Q O t
0 to CO O O
V) LL. N~ N~ ~ r N .N_. O r N ~
~ ? o ~ U ~ r r M ~
J c!~ ~''' ~ ~ ~
O W W `o
O Z ~
C
Q~ O
• ' M ' ' M
~ ~f ' ' O ' r ' ' r
iO N N
~ 00
~ ' ' ' to
~ M
M lp
ti N
~'
(~ 2 p
(0 r
~ N N ~ O O O tf) r !~ ~ f~
N U Q ~ ~ r r '
'
~ ~ r ~
~ Z O
O O ,. ~
~ 0
0
r' tt ~ 0
0
v
v N
r d'
Ln
ZQW~ U~ `'
~
~~Q ~
•
aW
~ ~
W
} C '
~
11 00 N O O 00
~efONM '7
I r ~- ' ~- '~
Mi,l~r M ~ r
O i i i 0
O r
M M
O ~
r
N I~ N O O O 1 0 d• N O M M O O O
m Z N ~ M ~- (p M In N ~'I CO Cfl O) ~' O t[7 to I~ M
W N C O f~ 00 O N E N O O O N '~ ~ r W
.`
In r 1~ ~ O
r N d0 00 r
O
l[')
M
In
OD
X ~ ~ N r r M M
I N ~ r ~ ~!7
W ~ ~ Ir
N
~ ~ ~ ~
~ ,C O
Z
?
W j
•_•
>
W C
~
~ d C
O N
L °~
w ~ ~ O O
c
~' U ~ ~ ~ ~ f/1 ~ "~ 7 '~
~
to L
(0 y~
~
v m N` c N
v
O
~ ~ C C •
~ ~ ~ N
O ~ ~ U fU
C N 'p
'
~ to
L ~
N p
0 ~
f C
C O
C
U N N
U
~
~' L
~ O w
-. N
~ ~ ~ O ~ 6
~
to td to C
O
~
a
~ O
>,
E E
O
'6 N C
N
U U U~~ I
y V Q N C N~~~ O ~ ~
~~~ m~ O I, N~ O Z O c~C C t/~ ~ m m
~ L L
C u~ m
L LL
O O ."' y
JJfnLL 'O M 1 7 O f0 N O
Cl
fnZU~~ y w LO O N N ~ (0 (0
; ~
i ~ ~a.OF-H V ~ "O
~ L X ~ ~ C C
L W O Z LL. Li
W
~ ~ (~O O ONO O N 000 N ~
~ N ~ O M ~ ~ ~ M ~
~ N C'7 00 ~ In r ~
r
ttT (fl
W_ ~~ .- M N O O O
~ O LCl 1~ .- ~ In ~
~- 00 O ~ N~ v 0
Q N ~. ..~
LL ~
O ~
~ w
W O .. >'' m c
~ ~ ui a~ o
O .iL.., N
~ N y N ~ p~ ~ U N N
Q N O V w C U~ 4= w d
(n ~ O ~ .~ ~ ~ ~ ~ N C M ..+
W f0 ~ ~ N C m O~ w N 0) ~
_ ~ N O OJ V1 C N O .O «+ .C
N ~ = L y C 0) ~ C •> ~
~ N ~ 0) 41
D O L~ ~ f6 C N N D ~ U ~ E w N
N w T
Z !n O C d ~ w y 'C cN6 m~ ~~ 0 03
LL W O O' O C ~ )C C~ t L o f O V
V~ Q « =O .v ~ W O O~ Q C p ~p to
J = O N C N N Q y N
~„~ Z Q N ui t6 O. ~ ` N O CA ~ ~ ~ ~ 0) C
G _ a ~ L >,,~ ~_ o c
~~~ ~~ ~ H c m w ° o m o uiv
r> _ m ~
O>~ W y O C C ~ ti C cO N j, ~ N >' C m
O Z Z ~ n3 ,~ c a~ o m m L E= w~
O m ~ ~ c~ >, a> _- a~ c~ c
= W W -~ ~ a~i n3 ~ ns 3 ~ v ~ ~ > = ~ o.
V1=ZW ~ ~ o E a~ c•c w.~ ~ m rnL ~ o
p y c E m~ L~ °~
~ Q `m ~ ~ c c~ ~ w 3° w~ o
Z O = W ~ ~ •a o ~ ~ aoi o w ~ ~ m c ~ ~ ~
~ Z p ~ ~ c ~ a~ rn ~ ° ~ c ~ ~ ~ ~ ~ m
V) ~ Q~ ~ c i, c~ ~~ v T w~ c~ v a E a~
Z~ ~ o.c ~ O ~•c ns ~ a`~H o•~a aoi
~ W ~ a~ ~ x ° °> uoi v ui o a~i o >, ~ ° X
o~ m ~ c m c v E ~ m c~ °~
d a~ rn c ~ ~ •c a~ f0 ~ ~ ~ ~ N ~ `n •~
W ~° ~ w X- ~ aEi cm `~~ yp ~ °~ ~ ~ ~-°o
= o w m v= r E m > ~ •c a ~,
~ C C ~ f6 ~ ».. O~ Q C C ~.- N N w •~- N O
W ~ ~ w N ~ ~ N ~ > ~ ~ X ~ ~ a Cl O. ~
~ c c a ~ o -a `m c o a~ ~ a~ ° ~ ui m E w
W y •~ m a~ ~ ~ a> m ~ °~ ~ o u, m ~ ~ ~ >,
~ > ~ a -a ~ m ~ >, ... .n ~
o ca ~ u, a~ a~ ~ ~-_~•, o f v ~ c •~ a~i m
~ ~ ~ H ~ '~ a N ~ O c ~ ° a~ a? o ° ~ c ~
~ C N N .` N ~ CA V N N ~ C~ T O) O` W
F- ~ o ~ > a o °- c `~ ~ ~ ~ rn y m o m ~ ~ aci
Z ° E :: = m° ~ •~ ~° ~ o ~ o m ~ m a •c m o E
W ~ E c w m O c ~ p c •~ ? = w nw E~~ ~
W .a o N N c -o OJ m ~' 'Q a~ y ~ c 3 .E x ~~ H ip o m o >
F- ~ °' a~ X ~~ v~ N x° N a ~ m m "-' in m a y m ~ ~° ~
~ w o ~ a~ T a~ v c o m o m m~~ x ~ x m w a~ ~ ~ -v w o_ °
~ 'p N~ N C C O Q U N C •~_ C w 0) ~~ X w N L m ~~ y
O N N~ O '~ O~ C O N~~` N O N N 'C 03 p~ O 0) '=O O 'O 01
~ ~ O •~ '~ ~ C •=~ C C H N a 'O ~ N (d O O O .y. 'y ,~ C ~ .~„ ~ N
Q Ci ~ O O N C C O V! (0 E~ C O) C O O) c~ C
~ N •aiU~ E `-° -o m y amomoQ m >~wn. E~ E m af6i E~ '~
_ ~ ~> m °' o m o~ aUi u~i m x m~ ~ m~ rn
~ O U o m w m v, m m m m ~ m a w .S ~ .~ m
~ Q L
U
fA
BIG SPRING SCHOOL DISTRICT
STATEMENT OF NET ASSETS -PROPRIETARY FUNDS
JUNE 30, 2012
(With Summarized Financial Information for June 30, 2011)
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
Accounts payable
Payroll and benefits payable
Due to other funds
Deferred revenues
Current portion of compensated absences
Total current liabilities
Long-term portion of compensated absences
Total liabilities
Net assets
Invested in capital assets (net of related debt)
Unrestricted
Total net assets
Total liabilities and net assets
Food Service
2012 2011
$ 389,309 $ 304,776
7,126 3, 392
6, 308 279
14,581 29,8816
417, 324 338, 333
499,101 502, 0913
$ 916,425 $ 840,46
$ 257 $ 2,890
1,103 2,204
95,498 4,750
17,264 16,192
1, 246 7, 000
115,368 33,036
- 21,425
115,368 54,461
499,101 502, 093
301, 956 283, 872
801,057 785,9615
$ 916,425 $ 840,426
The accompanying notes are an integral part of these financial statements.
FS-7
BIG SPRING SCHOOL DISTRICT
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS -PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2012
(With Summarized Financial Information for the Year Ended June 30, 2011)
Food Service
2012 2011
Operating revenues -Food service revenue $ 727,113 $ 806,467
Operating expenses
Salaries 458,276 487,986
Employee benefits 202,451 212,723
Purchased property service 62,000 66,000
Food and milk 518,903 558,073
Other expenses 28,321 8,730
Depreciation 71,583 71,497
Total operating expenses 1,341,534 1,405,009
Operating income (loss) (614,421) (598,542)
Nonoperating revenues
Earnings on investments 47 142
State sources -social security and retirement subsidies 26,850 31,855
State sources -meal subsidies 39,372 42,239
Federal sources -meal subsidies 390,758 398,839
Federal sources -donated commodities 58,535 64,384
Total nonoperating revenues 515,562 537,459
Income (loss) before transfers (98,859) (61,083)
Transfers from other funds 113,951 47,775
Changes in net assets 15,092 (13,308)
Net assets -beginning 785,965 799,273
Net assets -ending $ 801,057 $ 785,9G5
The accompanying notes are an integral part of these financial statements.
FS-8
BIG SPRING SCHOOL DISTRICT
STATEMENT OF CASH FLOWS -PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2012
(With Summarized Financial Information for the Year Ended June 30, 2011)
Operating activities
Cash received from users
Cash payments to employees for services
Cash payments to suppliers for goods and services
Net cash provided by (used for) operating activities
Non-capital financing activities
State sources
Federal sources
General Fund advances (Due to other funds)
General Fund contributed services
Net cash provided by (used for) non-capital financing activities
Capital and related financing activities
Capital Projects Fund for equipment
Capital Reserve Fund for equipment
Cash payments for equipment
Net cash provided by (used for) capital and related financing activities
Investing activities
Earnings on investments
Net cash provided by (used for) investing activities
Net change 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
Other receivables
Inventories
Accounts payable
Payroll and benefits payable
Deferred revenues
Compensated absences
Total adjustments
Net cash provided by (used for) operating activities
Food Service
2012 2011
$ 722,156 $ 805,394
(689,007) (708,788)
(538,017) 549,53)
(504,868) (452,92.7)
65,952 74,285
387,294 400,704
90,748 4,520
45,360 47,775
589,354 527,284
1,155 -
67,436 -
(68,591) -
47 142
47 142
84,533 74,499
304,776 230,277
$ 389, 309 $ 304, 776
$ (614,421) $ (598,542)
71, 583
58, 535
71,497
64,384
(6,029)
15, 305
(2,633)
(1,101)
1, 072
(27,179)
109, 553
$ (504,868)
75
15, 996
2,890
321
(1,148)
(8,400)
145,615
$ (452,927)
The accompanying notes are an integral part of these financial statements.
FS-9
BIG SPRING SCHOOL DISTRICT
STATEMENT OF NET ASSETS -FIDUCIARY FUNDS
JUNE 30, 2012
(With Summarized Financial Information for June 30, 2011)
Assets
Cash and cash equivalents
Investments
Total assets
Liabilities
Due to student groups
Total liabilities
Net assets
Total liabilities and net assets
Student Activities
2012 2011
$ 176,288 $ 179,035
10, 000 -
$ 186,288 $ 179,035
$ 186,288 $ 179,035
186,288 179,035
$ 186,288 $ 179,035
The accompanying notes are an integral part of these financial statements.
FS-10
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Big Spring School District is the level of government which has oversight responsibility and control over activities
related to public school education. The repprt 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.
The financial statements of Big Spring 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's Department
of Education. The more significant of these adcounting policies are as follows:
Reporting entity
GASB establishes criteria for determining the activities, organizations and functions of government to be included
in the financial statements 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 established criteria. The criteria used
to evaluate component units for possible inclusion as part of the District's reporting entity are:
The economic resources received or hdld 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 the separate organization that the District is entitled to (or has
the ability to) access is significant to the District.
There are no component units that meet all of the above criteria for inclusion in this reporting entity.
Jointly-governed organizations
The District is a participant in three jointly-governed organizations, each of which is a separate legal entity that
offers services to the District and its residents. Each entity 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 their administrative offices.
Capital Area Intermediate Unit provides special education services and programs.
FS-11
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2012
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Jointly~overned organizations (Cont'd.)
Cumberland Perry Area Vocational Technical School provides vocational and technical education services
and programs.
Cumberland County Tax Bureau provides earned income tax collection services.
Basis of presentation -District-wide financial statements
District-wide financial statements (i.e., the statement of net assets and the statement of activities) present
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.
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 recognizeed 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 chjarged as an expense against current operations. Capital assets (net
of accumulated depreciation} and bonds payable (net of 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 propdrly 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 reported as separate
columns in the fund financial statements. Nonmajor funds, if any, are aggregated and presented in a single
column. Fiduciary funds are reported by fund.
FS - 12
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2012
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Basis of presentation -Fund financial statements (Cont'd.)
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 availat~le.
Revenues are considered to be available uNhen 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 2 months of the end of the fiscal period. Revenue from federal, state and other grants
designated for payment of specific expendlitures 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 i~ 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 GASB. Operating
revenues and expenses are distinguished frdm 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
reported 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, the District's general policy is to use the restricted
(primarily operating grants) resources first, thin unrestricted resources as needed.
The District has the following types of funds:
Governmental Funds -These funds account for activities through which most of the District's operations are
provided.
Proprietary Funds -These funds account for operations of the District that are financed and operated in a
manner similar to private business enterprises.
Fiduciary Funds -These funds account 'for 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.
FS-13
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2012
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Basis of presentation -Fund financial statements (Cont'd.)
Fund accounting (Cont'd.)
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 pnly fund for which a budget is legally required.
The Pennsylvania School Code dicilates specific procedures relative to budget adoption and financial
statement presentation. 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 a~ 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 arrlend 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 qudgets 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. During the year these prmgrams increased both revenues and expenditures of the original
budget by $ 171,093.
The Capital Projects Fund can consist pf more than one project, to separately account for each project, if
required. Each issuance of new debt (pril~narily bonds) is a project to account for the debt proceeds and the
expenditure of those proceeds. The District also maintains a capital reserve account for funds transferred
from the General Fund and the expenditure of those funds for capital outlays.
The Debt Service Fund, when applicable, accounts for the refinancing of existing debt.
FS-14
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2012
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Basis of presentation -Fund financial statiements (Cont'd.j
Fund accounting (Cont'd.)
The District presents the following proprietary fund:
The Food Service Fund accounts for the operations of the cafeterias.
The District presents 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
Cash and cash equivalents are considered tp be cash on hand, demand deposits (including pooled investments),
and short-term investments with original matWrities of three months or less from the date of acquisition.
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 reported at fair value.
Taxes and taxes receivable
Real estate and personal 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.
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 from/to other funds". Any residual balances outstanding between the governmental
activities and business-type activities are reported in the district-wide financial statements as "internal balances".
Any balances between funds are short term items pending periodic repayments.
Inventories and prepaid items
Inventories are presented at the lower of cyst or market on a first-in, first-out basis, and are expensed when
consumed. Donated commodities are recognized as revenue and are inventoried at an estimated cost value.
Certain payments, if any, to vendors reflect expenses applicable to future periods and are presented as prepaid
items in both district-wide and fund financial statements.
FS-15
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2012
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
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 $ 1,500 and an estimated useful life in excess of one year. Management has elected to include certain
homogeneous groups with individual costs of less than $ 1,500 as capital assets for financial presentation
purposes. In addition, capital assets purchhased with long-term debt may be capitalized regardless of the
thresholds established. Such assets are presented 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 traight-line method, allowing for reasonable salvage values on
equipment, over the following estimated useful lives:
Assets
Governmental Business-type
Activities Activities
Buildings
Site improvements
Furniture
Machinery and equipment
Library books
Audio visual equipment
Technology equipment
Long-term liabilities
40 -
20 -
15 15
10 to 15 15
7 -
6 -
5 5
In district-wide financial statements, and Proprietary fund types in fund financial statements, bonds and notes
payable 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 discounts are amortized over the life of the
bonds using the effective interest method. Bohd issuance costs are presented as deferred charges and amortized
over the term of the related debt.
In 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.
FS-16
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2012
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Net assets
Net assets represent the difference between assets and liabilities. In district-wide financial statements and
proprietary fund financial statements, categories of net assets are:
Invested in capital assets (net of rebated debt) -This category presents all capital assets into ane
component of net assets. Accumulated depreciation and outstanding debt that are attributable to the
acquisition, construction or improvement bf these assets reduce this category.
Restricted -This category presents Hands restricted for a specific purpose as per: External parties,
contributors or enabling legislation.
Unrestricted -This category presents the net assets of the District, which are not restricted for any projector
other purpose. However, these funds may be committed or assigned for specific projects or purposes in the
fund financial statements.
Governmental fund balances
GASB has established criteria for classifying fund balances into specifically defined classifications based on a
hierarchy that reflects the extent to which thtr District is bound to honor constraints on how those funds can be
spent. Classifications of fund balances are:
Nonspendable -Amounts that cannot be spent because they are either in a (a) non-spendable form (i.e.
inventories) or (b) legally or contractually required to be maintained intact (i.e. the principal of a permanent
fund).
Restricted -Amounts constrained to be 'used for a specific purpose as per: External parties, contributors or
enabling legislation.
Committed -Amounts constrained to b~ used for a specific purpose as per: The District's highest level of
decision making authority which is the Board of School Directors.
Assigned -Amounts intended to be used) for a specific purpose as per: Committee or individual authorized by
the Board of School Directors (for example a budget or finance committee).
Unassigned -Amounts available for ;any purpose (amounts that are not Nonspendable, Restricted,
Committed or Assigned) in the General Fwnd.
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.
FS-17
BIG SPPtING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2012
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Recent accounting standards
There are several GASB pronouncements that will become effective for future reporting periods. Of the
pronouncements effective for the year ending June 2013, the District does not currently anticipate any significant
impact on the District's financial statements.
GASB Statement No. 63, effective for tt~e year ending June 2013, is to improve financial reporting by
standardizing the presentation of deferred dutflows of resources, deferred inflows of resources, and their effects
on the District's net position, rather than net assets. This pronouncement will impact terminology and presentation
of the Statement of Net Assets (page FS-1 ).
GASB Statement No. 68, effective for the year ending June 2015, is to improve accounting and financial reporting
for pensions. This pronouncement will impact the Statement of Net Assets (page FS-1 ), the Statement of
Activities (page FS-2), and the Pension Plan disclosures in the Notes to Financial Statements. The District has
not yet determined what effect GASB 68 will have on the District's financial statements.
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 presentatiion.
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 donjunction with the District's financial statements for the year ended
June 30, 2011, from which the summarized information was derived.
Subsequent events
In preparing these financial statements, khe District has evaluated events and transactions for potential
recognition or disclosure through October 25 2012, the date the financial statements were available to be issued.
CASH AND CASH EQUIVALENTS AND INVES$MENTS
Pennsylvania statutes provide for investment of District funds into 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 funds fir investment purposes.
FS-18
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2012
CASH AND CASH EQUIVALENTS AND INVEStMENTS (Cont'd.)
Custodial credit risk is the risk that in the event of a depository institution failure, the District's deposits may not be
returned to it. The District does not have a formal investment policy for custodial credit risk. However, the District
requires all deposits in excess of federal eposit insurance coverage to be collateralized by the depository
institution with approved collateral as provide. by law.
As of June 30, 2012, the District's deposits totaled $ 10,347,977 and the depository institution ,balances
totaled $ 10,968,664. Of the depository) institution balances, $ 9,256,446 was covered by federal deposit
insurance and $ 1,712,218 was collateralized. The pledged collateral is held by the Federal Reserve Bank,
but is not titled in the District's name.
The District also has cash equivalents aid investments with Pennsylvania School District Liquid Asset Fund
(PSDLAF) and Pennsylvania Local Government Investment Trust (PLGIT). PSDLAF and PLGIT operate as
common law trusts established pursuant ~o the Intergovernmental Cooperation Act and related statues for the
purpose of pooling investments. Each or anization's fundamental policy is to maintain a net asset value of $ 1
per share, but there can be no assuranc~ that the net asset value will not vary from $ 1 per share. They may
only purchase securities which are permuted under PA law. As of June 30, 2012, District deposits in PSDLAF
and PLGIT totaled $ 2,416,155 and $ 24,42, respectively.
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. T'he
District does not have a formal investment policy for interest rate risk. The weighted average maturity of securities
held by PSDLAF and PLGIT is generally lesslthan 90 days.
Credit risk is the risk that an issuer or other cbunterparty 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 PSDLAF and PLGIT were rated
"AAAm" by Standard & Poor's.
Cash and cash equivalents and investments ire as follows:
Governmental activities
Governmental activities - restrict$d for capital projects
Business-type activities
Fiduciary funds
Cash and Cash
Equivalents Investments
$ 3,399,109 $ 8,205,000
109,268 500,000
389,309 -
176.288 10.000
Investments consist of certificates of deposit with original maturities of more than three months from the date of
acquisition.
FS - 19
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2012
TAXES RECEIVABLE
Taxes receivable are as follows:
Taxes
Receivable
(Grossl
Real estate taxes ~ 824,666
Eamed income taxes 1,250,000
Personal taxes 22,209
General Fund 2,096,875
Full accrual adjustment
Governmental activities
DUE FROMITO OTHER FUNDS AND INTERFU~JD TRANSFERS
Interfund balances are as follows:
Assets
Capital Reserve Fund $ 1,500,000
General Fund 95,498
Interfund transfers were as follows:
Other financing s~urces
Capital Reserve Fund $ 1,500,000
Food Service Fund 45,360
Food Service Fund 1,155
Food Service Fund 67,436
Allowance for
Uncollectibles
$ 666
11.209
11, 875
$ 574,000
1,250, 000
11.000
1, 835, 000
(1, 835.000)
Liabilities
$ 1,500,000 General Fund
95,498 Food Service Fund
Other financing uses
$ 1,500,000 General Fund
45,360 General Fund
1,155 Capital Projects Fund
67,436 Capital Reserve Fund
Taxes
Receivable
(Net)
$ 824,000
1,250,000
11.000
2, 085, 000
Deferred'
Tax RevenNe
DUE FROM OTHER GOVERNMENTS
Due from other governments are as follows:
Local sources -earned income taxes
Local sources -IDEA - B grants
Local sources -other districts
Local sources -other items
State sources
Federal sources
Governmental
Activities
$ 692,086
303, 830
220, 704
84,346
618,916
118.724
Business-type
Activities
$ -
543
6.583
$ 7.17E
FS - 20
BIG SPR'~ING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2012
CAPITAL ASSETS
Changes in capital assets were as follows:
Governmental activities
Capital assets not being depreciated
Land
Capital assets being depreciated
Buildings and improvements
Furniture and equipment
Library books
Technology equipment
Accumulated depreciation
Buildings and improvements '
Furniture and equipment
Library books
Technology equipment
Beginning Ending
Balance Increases Decreases Balance
$ 986.824 $ - $ - $ 986.824
73,055,382 567,742 - 73,623,124
3,104,799 150,666 (31,262) 3,224,203
2,308,721 - - .2,308,721
4.880.062 96.523 - 4.976,5,85
83.348.964 814.931 (31,262) 84
132
633
.
.
(21,984,308) (1,764,990) - (23,749,298)
(2,085,455) (129,301) 31,262 (2,183,494)
(2,077,848) - - (2,077,848)
(4,365.260) (146.438) - (4,511.6,98)
(30.512.871) (2,040.729) 31.262 (32,522.3,38)
Capital assets being depreciated, net
Governmental activities capital assets, net
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
52.836.093 (1.225,798) - 51.610.2'95
$ 1,568,486 $ 68,591 $ - $ 1,637,077
(1,066.393) (71,583) - (1,137,976)
502.093 (2,992) - 499.101
FS-21
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2012
CAPITAL ASSETS (Cont'd.)
Depreciation expense was charged to functiolns/programs as follows:
Governmental activities
Instruction $ 1,624,358
Instructional student support 178,283
Administrative and financial support ' 79,237
Operation and maintenance of plant 99,046
Student activities 59.805
Business-type activities -Food service $ 71,~$,~
DEFERRED REVENUES
Governmental funds present deferred rev~nue 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 re~eived, but not yet earned. Deferred revenues in the General Fund of
$ 1,841,578 consists of $ 1,835,000 taxes receivable not received within 2 months of the end of the fiscal period,
and $ 6,578 of deferred revenue on a local grant.
Deferred revenues in proprietary funds and district-wide financial statements represent resources that have been
received but not yet earned.
LONG-TERM LIABILITIES
Changes in all long-term liabilities were as follows:
Beginnir>jg Ending Due Within
Balance Increases Decreases Balance One Year
Governmental activities
Bonds and notes payable $ 38,247,09 $ 9,800,000 $ (12,390,640) $ 35,657,269 $ 3,140,736
Compensated absences 715, ~ 00 1,490 (38,690) 677,900 100,000
Other post employment benefits 408. 123
39
71
t~ 474.948
$ 10
276
4 (330.081) 552.990 300.000
Business-type activities .
. .
.
38 (12.759.411) $ 36.888.159 3.540.736
Compensated absences $ 28,E $ 4.753 (~~ A~~) $ 1.246 1.24
FS-22
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2012
LONG-TERM LIABILITIES (Cont'd.)
Bonds and notes payable
Changes in bonds and notes payable were a~ follows:
Beginning Current Scheduled Ending
Balance Refundino Redemptions Balance
1999 Series ' $ 2,400,000 $ - $ (300,000) $ 2,100,000
2001 Series 625,000 - (625,000) -
2003 Series 12,455,000 - (1,095,000) 11,360,000
2006 Series 9,660,000 (9,660,000) - -
2006 Notes (energy savings project) 4,242,909 - (195,640) 4,047,269
2010 Series 8,865,000 - (475,000) 8,390,000
2011 Series - 9.800.000 (40.000) 9.760.000
In July 2011, the District issued its 2011 Series of bonds, which is summarized as follows
Amount of 2011 Series of bonds' $ 9,800,000
Premiums received on 2011 Serifs 207,653
Payoff 2006 Series of bonds (9,660,000)
Interest paid on the 2006 Series ' (192,122)
Transaction costs incurred (155.531)
Amount available to the District
Due Within
Interes Rates Maturity Date Callable Date One Year
1999 Series (1';) December 2017 45 days notice $ 315,000
2003 Series 3.65% tcb 5.00% April 2023 April 2013 1,150,000
2006 Notes ' 3.95% December 2021 Annually, with fees 225,736
2010 Series 2.00% t~ 3.00% June 2022 December 2015 490,OD0
2011 Series 2.00% td 4.00% February 2021 August 2016 960.000.
(1) The 1999 Series pays interest ~t a variable rate of 1.45% above the "weekly rate", not to exceed
25.00%. At June 2012 the "weekl~r rate" was 0.23%.
FS - 23
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2012
LONG-TERM LIABILITIES (Cont'd.)
Bonds and notes payable (Cont'd.) ',
Scheduled debt service requirements, payable by the General Fund, are as follows:
Year Ending June ', Principal Interest Total
2013 $ 3,140,736 $ 1,203,192 $ 4,343,928
2014 ' 3,288,151 1, 092, 881 4, 381, 032
2015 3,433,030 988,276 4,421,06
2016 ', 3,575,532 887,815 4,463,347
2017 3,505,823 760,319 4,266,142
2018-2022 ' 17,913,997 1,989,563 19,903,560
2023 800.000 35.200 835.00
Compensated absences
Compensated absences (those for which
payment method. A liability is computed us
maintains records of unused leave and
allowance. The District allows only restric
advance of the sabbatical. Payments for co
employee retires.
ip~oyees are compensated) are presented using the termination
estimates which apply historical data to current factors. The District
ies the contracted rate for employees eligible for the severance
sabbatical leave and therefore does not present any liability in
~nsated absences are made in the year the absence is taken or the
At retirement or death, while in District servi e, employees or their beneficiaries shall choose one of the available
options (subject to a maximum of $ 18,000 f r administrators, $ 14,950 for teaching staff and $ 9,884 for classiflied
staff). The severance allowance is paid as a District contribution into the employee's 403(b) tax sheltered annuity
account.
Other post employment benefits (OPEBs)
OPEBs are presented in accordance with G~SB Statement No. 45 (GASB 45), which requires their recognition as
part of the compensation package of active ~mployees for services rendered. The cost and obligation for OPEBs
are measured by an actuarial valuation.
Plan description
Under the negotiations agreement witi~ Big Spring Education Association, the District shall provide for
continuance of health care insurance aft~r retirement until age 65. The retiree will pay the monthly premiums,
except that teachers who retire after 30 for 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 of the single employee
only coverage plan.
FS-24
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2012
LONG-TERM LIABILITIES (Cont'd.)
Other post employment benefits (OPEBs)
Plan description (Cont'd.)
Retired administrators, and classified
described above. Classified employees
Retiree's premiums are less than the C
premium amount retirees pay is a blenc
that the blended rate that retirees pay is
results in what is known as an "implicit r.
Participant information
Active participants
Vested former members
Retired participants
Funding Policy
~yees hired prior to July 2007, receive the same benefit as
after June 2007 must pay the entire premium.
~ict's actual cost to provide health care coverage to retirees. The
rate for covering both active and retired Plan members. The fact
s than the cost of covering retired members and their beneficiat~ies
subsidy," which creates an additional cost to the District.
360
6
68
The District funds Plan liabilities on a " ay-as-you-go" basis, and has not established an OPEB trust fund to
accumulate assets to fund Plan obligati ns. The District has no statutory or contractual obligation to fund the
Plan and would only do so at the District s discretion.
Annual OPEB cost and net OPEB obl
The annual OPEB cost (expense) is calculated based on the actuarially determined annual required
contribution (ARC) of the employer. Th ARC represents the amount needed to fund the cost of benefits
attributed to the current year, plus an a ortized portion of the unfunded actuarial accrued liability (UAAL). The
District uses an amortization method whi h results in the UAAL being amortized over a remaining period of 26
years. ',
FS - 25
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2012
LONG-TERM LIABILITIES (Cont'd.)
Other post employment benefits (OPEBs) kCont'd.)
Annual OPEB cost and net OPEB obligation (Cont'd.)
Components of the annual OPEB cost, ~he amount contributed to the Plan, and changes in the net OPEB
obligation are as follows:
Employer normal cost ', $ 252,524
Amortization of unfunded actuari~l accrued liability 229.113
Annual required contribution I 481,637
Interest on the net OPEB obligation 18,366
Adjustment to the ARC ', (25.055)
Annual OPEB cost ' 474,948
Contributed to the plan (330.081)
Increase in net OPEB obligation ', 144,867
Net OPEB obligation -beginning', 408.123
Net OPEB obligation -end ', $ 552.990
The percentage of annual OPEB cost contributed was as follows:
Percentage of
Annual Annual OPEB Net OPEB
Year ended ' OPEB Cost Cost Contributed Obligation
June 2012 ' $ 474,948 69.50% $ 552,990
Funding status and funding progress
The actuarial accrued liability (AAL) for ~ PEBs as of July 2010 was $ 3,732,005. There are no Plan assets,
thus, the entire amount is unfunded. The~istrict does not have any current plans to fund the AAL.
Actu rial UAAL as
Actuarial Actuarial Accr ed a % of
Valuation Value of Liab lity Unfunded Funded Covered Covered
Date Assets L AAL Ratio Payroll Pavroll
July 2010 $ - $ 3,73,005 $ 3,732,005 0.00% $16,852,109 22.15%
FS - 26
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE. 30, 2012
LONG-TERM LIABILITIES (Cont'd.)
Other post employment benefits (OPEBs)
Actuarial assumptions and methods
Actuarial assumptions and methods
Interest rate
General inflation rate
Health care cost trend rate
Actuarial cost method
Amortization period
Actuarial evaluations on an ongoing bas
the probability of events far into the
mortality, and the healthcare cost trend.
actual results are compared to past expe
in the July 2010 actuarial valuation include the following:
4.50%
3.00%
6.5% in 2012 decreasing by 0.5% per year to 5.5% in 2014.
Rates gradually decrease from 5.3% in 2015 to 4.2% in 2019
and later
Benefits are allocated on a level basis over the earnings of
an individual from date of hire to assumed retirement age
30 years (26 years remaining)
involve estimates of the reported amounts and assumptions about
Lure. Examples include assumptions about future employment,
ctuarially determined amounts are subject to continual revision as
~tions and new estimates are made about the future.
Projections of benefits are based on t e types of benefits provided under the plan at the time of each
valuation and on the pattern of sharing o~ benefit costs between the employer and plan members to that paint
in time.
Actuarial calculations reflect along-term erspective, and consistent with that perspective, actuarial methods
and assumptions used include techniq es that are designed to reduce short-term volatility in accrued
liabilities.
The required schedule of funding pr gress in the other required supplementary information (ORSI)
immediately following the notes to fina cial statements, is to present multi-year trend information about
whether the actuarial value of Plan ass is is increasing or decreasing over time relative to the actuarial
accrued liability for benefits. However, b cause the District maintains no Plan assets, information relative to
Plan asset disclosures is not applicable. Additionally, because the June 2009 year was the implementation
year of GASB 45, the OPEB disclosure s andards were implemented prospectively; therefore, the ORSI does
not reflect similar information for three co secutive valuations.
FS - 27
BIG SPRMNG SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Confd.)
JUNE 30, 2012
PENSION PLAN ,
Substantially all full-time and part-time empl gees of the District participate in the plan. The District recognises
expenditures or expenses equal to its contra tually-required contributions, subject to the modified accrual basis of
accounting in governmental funds.
The District contributes to Public School E
sharing multiple-employer defined benefit pl
Retirement Code (the Code), as amended.
hoc cost-of-living adjustments, and health
System issues a comprehensive annual
supplementary information for the plan. A cc
125, Harrisburg, PA 17108-0125, or on the
~loyees' Retirement System (the System), a governmental cost
The plan is under the authority of The Public School Employes'
plan provides retirement and disability, legislatively mandated'ad
insurance premium assistance to qualifying annuitants. The
uncial report that includes financial statements and requited
of the report may be obtained by writing to the System at PO Box
tern's website.
The contribution policy is established in the ode and requires contributions by active members, employers and
the Commonwealth. Contribution rates for ctive members are set by law and are dependent upon members'
class. In most cases, the member contributio rates based on qualified compensation are as follows:
Membership Class T-C Active mem ers hired before July 22, 1983 5.25%
Membership Class T-C Members hi ed on or after July 22, 1983 6.25%
and who we a active or inactive as of July 1, 2001
Membership Class T-D Active mem ers hired before July 22, 1983 6.50%
Membership Class T-D Members hi ed on or after July 22, 1983 7.50%
and who we a active or inactive as of July 1, 2001
Membership Class T-D Members hi ed from July 1, 2001 thru June 30, 2011 7.50%
Members hired after June 30, 2011 are au omatically Membership Class T-E and have a member contribution
rate of 7.50% (base rate). Members hired a er June 30, 2011 who elect Membership Class T-F have a member
contribution rate of 10.30% (base rate). Me bership Class T-E and T-F are affected by a `shared risk' provision in
Act 120 of 2010 that in fiscal years could ca se the Membership Class T-E contribution rate to fluctuate between
7.50% and 9.50% and Membership Class T- contribution rate to fluctuate between 10.30% and 12.30%.
Contributions required of employers are ba ed upon an actuarial valuation. For fiscal year ended June 2012 the
employer contribution rate was 8.65 percen of covered payroll, composed of 8.00 percent for pension benefits
and 0.65 percent for healthcare insurance premium assistance. District contributions to the system for years
ended June 2012, 2011 and 2010 were $ 1,610,064, $ 1,035,670, and $ 867,260, respectively. Those amounts
are equal to the required contributions for each year.
FS - 28
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2012
RISK MANAGEMENT
Health insurance
The District's health insurance plan through South Central Trust allows each participant to choose one of the
three available coverage options. South Cen ral Trust is not a risk sharing pool. The Trust was established for
processing claims and obtaining reinsurance through commercial insurance carriers. The Trust has reinsurance
for claims in excess of $ 100,000 specific (er person) and 125% aggregate (estimated District annual cost).
Financial statements of the trust are provide to the member districts. District transactions within the Trust were
as follows:
Cash balance in the trust -beginning $ 1,422,912
Payments from the District and it~ retirees 4,169,018
Benefit claims paid by the trust $ (4,232,324)
Administrative and other fees, ne~ of interest earned (218,285)
Stop loss premiums (79.165)
(4,529,774)
Cash balance in the trust - ending 1,062,156
District accrual for health insurance benefits 250.Op0
Amount available for benefit clainfis 1.312.156
The amount available for benefit claims was ~s follows:
Accrual for benefit claims $ 712,581
Accrual for administrative and ot~er fees 49,5'75
Accrual for health insurance cov rage on payroll payable _ 550.000
Amount available for benefit claims 1.312.156
There are various methodologies for estimati g a reasonable accrual for benefit claims. District management his
selected the methodology of approximate '60 days of paid claims'. District management believes this
methodology provides an adequate amount f r accrued costs.
Other insurance
The District is exposed to various risks of I ss related to torts; theft of, damage to, and destruction of assets;
errors and omissions; injuries to employees; and natural disasters. The District maintains commercial insuranice
coverage covering each of those risks of los .Management believes such coverage is sufficient to preclude any
significant uninsured losses to the District. S ttled claims have not exceeded this commercial coverage in any of
the past three fiscal years.
FS - 29
BIG SPRING SCHOOL DISTRICT
' NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2012
RISK MANAGEMENT (Cont'd.)
Other insurance (Cont'd.)
For State unemployment compensation law ,the District is self-insured, which is a common practice for looal
governmental units. Any unemployment claims are paid by the District on a quarterly basis as incurred.
For workers' compensation insurance, appr ~ximately 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 Distr ct's annual cost should not exceed standard commercial insurance
rates.
COMMITTED FUND BALANCE
Committed amounts of fund balance of the General Fund are as follows:
Pension plan rate increases
Health insurance
Technology
Special education
$ 954, 000
350, 000
400, 000
250.000
COMMITMENTS AND CONTINGENCIES
The District's contract with its teaching staff e~Cpires in June 2014.
In the normal course of business, the Dist~ict is subject to legal disputes and claims. The District does not
anticipate any material losses from any pending or threatened litigation.
In the normal course of preparing for the ubsequent school year, the District has awarded bids for variaus
supplies, fuel contracts, etc. No major com~itments in excess of routine requirements have been made by the
District.
The District participates in state and federal -rant programs which are governed by various rules and regulations.
Expenditures charged to these grant progr ms are subject to program compliance audits and reviews by the
grantor agencies. The District is potentially fable for any expenditure which may be disallowed by the rules. of
these grant programs. The District does not a ticipate any material disallowance of program expenditures.
FS - 30
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2012
SUBSEQUENT EVENTS
In August 2012 the District authorized the issuance of Bonds in the amount up to $ 18,455,000. The Bonds miay
be issued in one or more series during the 2012 and 2013 calendar years. The purpose of the Bonds is to
refund/restructure the District's outstanding 2003 Bonds and 2006 Notes, and take advantage of favorable
interest rates.
As of the date of this report, the 2012 Series Bonds are scheduled to settle on October 31, 2012. These Bonds,
rated AA-, have interest rates ranging from .35% up to 2.00% with a final maturity of April 1, 2023. The 20'12
Bonds were successful in refunding/restruct ring a portion of the 2003 Bonds and the 2006 Notes. Overall, the
District will save on average $ 397,000 ($ 02,000 Net of State Reimbursement) annually over the next nihe
years. The 2023 debt service will increase b approximately $ 3,000,000. Overall, the net savings per the 20'12
Bond structure was $ 656,817 ($ 330,376 Ne of State Reimbursement).
FS-31
rNOr N OI~~CO ' rM0 tn(A1~M000OCOtn ' i~ O COO r N M
CA'~OO ~ OO~tn 00M~ 00r11)~r(DMtnr ~ Cp r~ M O N
~ 00 I~ O d' N 1~ ~' ~ 00 I~ N C O CD CO O O OO N OO N O O N r O f~ O
~ ~ ~ o00 -n ~ r ~s1'N NOI~ON f~ t?' r I~ CO d' ~ O M
~ N CO N O e-- NCO N O I~ M O Q' ~ '~ N
U N M ~ N N ~ r O r M to O
m
~_ r r N r r N
CO f0
'C C
_
> ~
b4 EA
Z
LL
qJ
LL
~ W
Uw
~O
E"' ~ ~
Z
~ O N
0 ~ W
U?o
yZ0
O
C7 z
Z ~ W
Q
N ~ ~
~ O
U
m ~
Q
H
W
0
m
O N (A (A 00 O N O N O OO 'cf (O r~ 0 0 'd' N~ f~ r ' ~ r O' r M ~
tn~ON M O~I~ON OrO COCOrOI~M~tOM ~ O CO M O r
N 1~ N O O CO ~ N !F' B O O CO r CIO ~ Op O •r S O N CO M M O CA O
M•-COM tn ~I~COrN OMCD O~~tna0~ao~CA st O tC') to ~ M
O f~ 00 CO N r N N 0 Mtn I~ MOO ~ O ~' N O N CA O N ~ 1~ r O
3 tnr~tn O O toCOr 67Mr ~M~~ I~ OD r O In M to O
V ~ r to N to CO r N M N M (n N r r ~ to
~ N r ~• r M
~ fH
f~OCAO CO 00~000~d)~CO CD COIN ~O~MCO ' d' N ~O ' r r
COO r r O 00 M r In N I~ d' I~ ~ 00 CO In 00 O h N ~F O O cr In O M
M O r M I~ In N 00 N ti O r M r~ r 00 00 O CO 00 V ~ M r r r r
•- t~ 00 M CA ~ N CO M N ~ 00 (A r d' ~- N 00 O to O M CO M O ~ 07 ~
~ 000Or(A tn r ENO Mto~ MO~'rtoMONO
'
' ti O Mt7 t0 O
Nr~tn et CA toCOr ~OMr
1~~ O r
cr~ Cp 1~ COr O) (A
N r~ O ~ CO ~- N M N ~ ~ v N N
~Y M
~ ~
I~OCOO M ODOI~OD ''OMO CO COCONOOtn00 ' CA ~ ~O ' r r
COONr O OMrN jN~'O ~MCOtnOOOOO -n ~' ~O O CA
MOO M -~ C CA 00 h i M 1~ M to 1~ N ~' N O r 0 eo O CO O O r r
r~~ M O ti N CO r ~ O r (O (D CA 1~ CA c'M O CO N O N CO COO O O
~ OO CO ~ (A 00 O to O M ~ N N O N ~ ~ r N M N M ~ ~}' ~' s'r O CO CO
N r N -n N ~ O ~ r 100 N (A ~ t7 O ~f r O CO ~ 00 CON O (A
•C Mrtn O to CO r~ ~N ~ O N N
O N r ~ !' M
~ ~
N
N
7
~
_
C
N
a
x
a~
a~
0
c a>
~ N c
a m °
~
o ~ a~ ~
E `~
c
a =
o
c
i ,~
O
~ NI
~ N N~
`
~
CA
~ N y
~
N
to ~
N N ~
~ i
~ O C ~ ~
~~ U N fl. ~ N C)
~ ~
3 C m
N
~ O _
N
~ V U ~
Z ~ N
O ~ 'C
~ M N ~ ~ f0 ~
N .
c N 'a V ~ c v~
~ ` C~
~ Q N 'a
~
~~ CT
` U O
o °'
~ O C y •V ~
> N
c Z° ~ a
o ~'
X
w O O
~
~
~ O
n C
m
7 7
~ a
~
Q N
p
-a ~ m
C Ci N Q~ ~' .- .~
R C N i
a N o
'
O ~ i ~
O f
f0
0 0 0 +-, -
~
rn ~ C C p CO N
~ ... y~ C Z O
p 0 t!1 N M CSC p N ~
C~ C N N
CA m (A N O N N (0 ,O i. .
O. U' .C N C N C~ p 'C
~ rn O X v O) w U U
to N CO O N ~
" ~ ~ U CCI y N
t __ ` .C __ C ~ N ~ ~ N
C
.
E
~
~° I- W to y O
~ O Co to
C
~ U U~ ~ N V t
a y ~
Q...+
d
E~ .~
C t
w C
'a C
m
ca
0o m
~J_I(/~Lt. mao--.-
~~(!»O= ~
v~~c-~a~..~oa>a~
a ~QamOtnUOc~Um~ _ ~~
Hm m
~ ~ v -o 'O
a
i
~ X-
w .c
Z
O ti ti
N
C
7
O
E
r
C~
BIG SPRING SCHOOL DISTRICT
OTHER POST EMPLOYMENT BENEFIT PLANS
JUNE 30, 2012
HE LTH CARE BENEFITS
SCHEDULE OF FUNDING PROGRESS
Actu rial UAAL as
Actuarial Actuarial Accr ed a % pf
Valuation Value of Liab lity Unfunded Funded Covered Covereed
Date Assets (AA ~L) AAL Ratio Payroll Pa r II
July 2010 $ - $ 3,73,005 $ 3,732,005 0.00% $ 16,852,109 22.15%
July 2008 - 3,99 ,512 3,995,512 0.00% 15,104,065 26.45%
The District is required to have an actuarial valuation at least biennially (every 2 years). If the plan experiences
significant changes, a new actuarial valuati~n should be performed rather than waiting for the next scheduled
valuation date.
Because the June 2009 year was the implementation year for GASB 45, and the District chose to implement
prospectively, the above illustration does not eflect similar information for three consecutive valuations.
ORSI - 2