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HomeMy WebLinkAbout05-0524 ~. 05/. ;['.2 Y ~ IJ..- SIDPPENSBURG AREA SCHOOL DISTRICT FINANCIAL REPORT JUNE 30, 2004 CONTENTS INDEPENDENT AUDITOR'S REPORT 1-2 Management's Discussion & Analysis 3 -10 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets 11 - 12 Statement of Activities 13 Fund Financial Statements: Balance Sheet - Governmental Funds 14 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets 15 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 16 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities 17 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund 18 Statement of Net Assets - Proprietary Fund - Food Service 19 Statement of Revenues, Expenses and Change in Net Assets - Proprietary Fund - Food Service 20 Statement of Cash Flows - Proprietary Fund - Food Service 21 - 22 Statement of Fiduciary Net Assets 23 Notes to Financial Statements 24 - 39 CONTENTS (Continued) SUPPLEMENTARY lNFORMATION General Fund - Schedule of Revenues 40 - 41 General Fund - Schedule of Expenditures 42 - 47 Combining Balance Sheet - Non-Major Governmental Funds 48 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Non-Major Governmental Funds 49 Combining Statement of Fiduciary Net Assets- Activity Funds 50 -51 Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 52 - 53 Independent Auditor's Report on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in Accordance with OMB Circular A-133 54 - 55 Schedule of Findings and Questioned Costs 56 - 57 Schedule of Expenditures of Federal Awards 58 - 61 Notes to Schedule of Expenditures of Federal Awards 62 Summary Schedule of Prior Year's Audit Findings 63 (~] BoYER & RITTER CERTIFIED PuBLIC ACCOUNTANTS AND CONSULTANTS Web Site: www.cpabr.com INDEPENDENT AUDITOR'S REPORT Board of Schoo] Directors Shippensburg Area School District Shippensburg, Pennsylvania We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Shippensburg Area Schoo] District, as of and for the year ended June 30, 2004, which collective]y comprise Shippensburg Area School District's basic financial statements as listed in the table of contents. These fmancial statements are the responsibility of Shippensburg Area School District's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by.the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. As explained in Note 2 to the Financial Statements, during the year ended June 30, 2004, the District adopted Statement of Governmenta] Accounting Standards (SGAS) No. 39, Determining Whether Certain Organizations are Component Units, an amendment to SGAS No. 14. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Shippensburg Area Schoo] District, as of June 30, 2004, and the respective changes in fmancia1 position and cash flows, where applicab]e, thereof and the respective budgetary comparison for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated August 13, 2004, on our consideration of Shippensburg Area Schoo] District's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integra] part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. CAMP HILL CARLISLE CHAMBERSBURG LEWISTOWN STATE COLLEGE An Independently Owned Member of the RSM McGladrey Network Management's Discussion & Analysis on pages 3 through 10 is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Shippensburg Area School District's basic financial statements. The combining and individual non-major fund financial statements and other schedules, listed in the table of contents as supplementary information are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements, and in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. ~~~ Chambersburg, Pennsylvania August 13, 2004 2 MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) SHIPPENSBURG AREA SCHOOL DISTRICT June 30, 2004 Management's Discussion & Analysis of Shippensburg Area School District's (District) fmancial performance provides an overall review of the District's financial activities for the fiscal year ended June 30, 2004. The intent of this discussion and analysis is to look at the District's financial performance as a whole; readers should also review the transmittal letter, notes to the basic financial statements l\nd financial statements to enhance their understanding of the District's financial performance. Management's Discussion & Analysis (MD&A) is an element of the new reporting model adopted by the Governmental Accounting Standards Board (GASB) in their Statement No. 34, Basic Financial Statements and Management's Discussion & Analysis for State and Local Governments, issued in June 1999. Certain comparative information between the current year and the prior year is required to be presented in MD&A. Financial Highlights Special Education The trends of prior years indicated that during the fiscal year 2003-2004, the Shippensburg Area School District would experience another year of siguificant increases in costs for Special Education Instruction. Alternative Education Alternative Education costs increased siguificantly during the 2003-2004 fiscal year. The District transferred increased financial resources to fund Alternative Education Placements for at-risk students during the fiscal year. Building Program Due to increased enrollment, the District is planning to build a Grade 4-5 building and to complete limited renovations on the James Burd and Nancy Grayson Elementary Schools. The District applied for and received a variance of Pennsylvania Department of Education's (PDE) 20-year rule for reimbursable projects. The District will receive state reimbursement on the renovations of the existing elementary schools and the new Grade 4-5 building. The District borrowed $9,945,000 for construction of a new Grade 4-5 building and renovations and construction at the existing Nancy Grayson and James Burd Elementary Schools. Borrowing The Board of School Directors borrowed $9,945,000 for construction of a new Grade 4-5 building and renovations and construction at the existing Nancy Grayson and James Burd Elementary Schools. The source of the borrowing is New Garden Variable Rate Bond Pool. The Board of School Directors issued an additional $15.4 million dollars for the construction projects subsequent to June 30, 2004. 3 Table A-I summarizes the major features of the District's financial statements, including the portion of the District they cover and the types of information they contain. The remainder to this overview section of MD&A explains the structure and contents of the statements. Table A-I Major Features of Shippensburg Area School District's Government-Wide and Fund Financial Statements Government-Wide Fund Statements Statements Governmental Funds Proorietarv Funds Fiduciary Funds Scope Entire District (except Activities of the District Activities the District Activities in which the fiduciary funds) that are not operates similar to District is the trustee or proprietary or private business - agent to someone else's fiduciary, such as Food Service resources education, Activity Fundi administration and conununitv services Required Financial Statement of Net Assets Balance Sheet Statement of Net Assets Statement of Fiduciary InftJrmatltm Net Assets Statement of Revenues, Statement of Revenues. Statement of Activities Expenditures and Expenses and Changes Statement nf Changes Changes in Fund in Net Assets in Fiduciary Net Assets Balances Starement of Cash Flows Accounting BII$;' and Accrual accounting and Modified-accrual ACCtual accoWlting and Accrual accolDlting and Measurement FtJcus economic-resources accounting and current economic-resources economic~resources fncus financial-resources focus focus focus Type of assetlllability All assets and Only assets expected to All assets and AU assets and information liabilities, both be used up and liabilities. both liabilities. both short~ financial and capital, liabilities that come due financial and capital, term and long.tenn and short-term and during the year or soon and short-term and 1000g-term thereafter; no capital long-term assets included Type of injWw/outjlow All revenUes and Revenues for which AU revenues and AU revenues and information expenses during the cash is received during expenses during the expenses during the year, regsrdless of or soon after the end of year, regardless of year, regardless of when cash is received the year; expenditures when cash is received when casb is received or paid when goods or services or paid or paid have been received and payment is due during the year or soon thereafter 4 Overview of Financial Statements Government-Wide Statements The government-wide statements report information about the District as a whole using accounting methods similar to those used by private-sector companies. The Statement of Net Assets includes all of the government's assets and liabilities. All of the current year's revenues and expenses are accounted for in the Statement of Activities regardless of when cash is received or paid. The two government-wide statements report the District's net assets and how they have changed. Net assets, the difference between the District's assets and liabilities, are one way to measure the District's financial health or position. Over time, increases or decreases in the District's net assets are an indication of whether its financial health is improving or deteriorating, respectively. To assess the overall health of the District, additional non-financial factors, such as changes in the District's property-tax base and the performance of students, must be considered. The government-wide financial statements of the District are divided into two categories: . Government activities - All of the District's basic services are included here, such as instruction, administration and community services. Property taxes and state and Federal subsidies and grants finance most of these activities. . Business-type activities - The District conducts a food-service operation and charges fees to students, staff and visitors to cover the costs of their operation. Fund Financial Statements The District's fund financial statements provide detailed information about the most significant funds _ not the District as a whole. Some funds are required by state law and by bond requirements. Governmental funds - Most of the District's activities are reported in governmental funds, which focus on the determination of financial position and change in financial position, not on income determination. They are reported using an accounting method called modified-accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental-fund statements provide a detailed, short-term view of the District's operations and the services it provides. Governmental-fund information helps the reader determine whether there are more or fewer financial resources that can be spent in the near future to fmance the District's programs. The relationship (or differences) between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds is reconciled in the financial statements. Proprietary funds - These funds are used to account for the District's activities that are similar to business operations in the private sector; or where the reporting focuses on determining net income, financial position, changes in financial position, and where a significant portion of funding comes through user charges. When the District charges customers for services it provides - whether outside customers or to other units in the District - these services are generally reported in proprietary funds. The Food Service Fund is the District's proprietary fund and is the same as the business-type activities reported in the government-wide statements, but provides more detail and additional information such as cash flows. 5 Fiduciary fuuds - The District is the trustee, or fiduciary, for several activity funds. All fiduciary activities are reported in a separate Statement of Net Assets. We exclude these activities from the District's other financial statements because the District cannot use these assets to finance operations. Financial Analysis of the District as a Whole The District's total net assets were $8,547,044 at June 30, 2004. Table A-2 As of June 30, 2004 Net Assets 6130103 S 4,406,391 20.662.552 $ 25.068.943 6/30104 S 13,765,422 20.485.634 S 34.151,056 Total P""".... Chan.to 2003-2004 212.40% -0.86% 36.63% Current and other assets Capital assets TobI uub Governrnental Activities 6130103 6130/04 S 4,362.661 S 13,704.577 $ 20,557,416 20.261.510 $ 24.920,077 S 33,966,087 $ Business--TYJ)eActivities 6130103 6130104 43,730 $ 60,845 105.136 224.124 148.866 S 284,969 Total C~andotbetliabiJities Long#tenn liabilities Total UabUll:ie. S 3,842,752 13.084.931 S. 16.921,683 S 3,778,521 S 21.824.183 $ 25,602.704 $ 53,713 S 26.497 80.210 $ 88,059 13.249 JOI.308 S 3,896,465 13.IJJ,428 S 17,007.893 $ 3,&66,5:&0 21.837A12 $ 25.704,012 0.1'7% -66.55% .Sl.13% Net Assets Invatedincapitalassets, net of related debt Restricted Uprestricted TotIlaetas.etl S 7,062,416 S (2,607,901) S 346,791 S 197,626 S 7,409,207 S (2.410.275) 132.53% 79.565 74.154 79,565 74,154 6.80% 850.413 10.897,1:30 (278,135) (13,965) 572,278 10,883.165 .1801.73% S 7,992.394 S 8,363,383 S 68,656 S 183.661 S 8,061,050 S 8,541,044 -6.03% Most of the District's net assets are invested in capital assets (land, site improvements, buildings and equipment). The remaining unrestricted net assets consist of designated and undesignated amounts. The designated balances are amounts set aside to fund future purchases or capital projects as planned by the District. The results of this year's operations as a whole are reported in the Statement of Activities. All expenses are reported in the first column. Specific charges, grants, revenues and subsidies that directly relate to specific expense categories are presented to determine the final amount of the District's activities which are supported by other general revenues. The two largest general revenues are the Basic Education Subsidy provided by the Commonwealth of Pennsylvania, and the local taxes assessed to community taxpayers. 6 Table A-3 restates infonnation from the Statement of Activities in a different format. Table A-3 Fiscal Years ended June 30, 2004 and 2003 Changes in Net Assets Total Governmental Activi~ Percentage 6130103 Business-Type ActiviQcs Tolal Chan.to (Restated) 6/30/04 6/30/03 6130104 6130103 6130/04 2003-2004 RevenueJ Program revenues Charges for services S 131,463 S 88,888 S 628,699 S 652,394 S 760,162 S 741,282 -2.48% Opemting grants and comn'butions 4,598,537 4,911,891 295,541 327,782 4,894,078 5,239,673 7.06% General re'nnutS Property <axes 9,71I,322 10,787,383 9,711,322 10,787,38] 11.08% Othu..... 2,596,131 3.098,326 2,596,131 ],098,326 19.34% Grants, subsidies and contnbutioIlS, unrestricted 6,512,823 6,644,236 6,512,823 6,644,236 2.Q2% 00..- 136.777 205.192 782 554 137.559 205.746 49.57% Total revell\lel 23,687,053 25.735.916 925,022 980.730 24,612.075 26.716.646 8.55% ExpeDlet lnstruction 16,355,431 17,052,868 16,355,431 17,052,868 -4.26% lnstruetional student support 1.921,458 1,898,073 1,921.453 1,898,073 1.22% Administrative and financial support: 1,919,101 1,993.747 1,919,101 1.993.747 ~3.89% Opentioo and JI8int. ofpIant services 1.836,766 1,773,716 1,836,766 1.773,716 3.43% Pupil.........tion 1,531,751 1,577,244 1,531,751 1,577,244 -2.97% Student activities 441.847 441,211 441,841 441,211 0.14% Conmmity services 14,461 17,744 14,461 17,744 ~22.70% Interest on Iong-tl:mt debt 281,147 358,990 287,147 358,990 ~25.02% Food servke 922.037 1.011.923 922,037 1.011.923 -9.75% Total opt... 24.307.962 25.113.593 922.037 1.011.923 25.229.999 26.125.516 -3.55% Challpl in lIet au,tI S (620.909) S 622,323 S 2,985 S (31.193) S (617,924) S 591,130 195.66% 7 The tables below present the expenses of both the Governmental and Business-Type Activities of the District. Table A-4 presents the District's seven (7) largest functions - instructional programs, instructional student support, administration, operation and maintenance of plant services, pupil transportation, student activities and community services and each program's net cost (total cost less revenues generated by the activities). This table also shows the net costs offset by the other unrestricted grants, subsidies and contributions to show the remaining financial needs supported by local taxes and other miscellaneous revenues. Table A-4 Fiscal Years Ended June 30, 2004 and 2003 Governmental Activities FunctionsJPrograrns Instruction Instructional student support Administration Operation and maintenance Pupil transportation Student activities Connnunity services Interest on long-term debt Total governmental activities Less unrestricted grants, subsidies Total needs for grants, taxes and other revenues Total Cost of Services 6/30/2003 (Restated) $ 16,355,431 1,921,458 1,919,101 1,836,766 1,531,751 441,847 14,461 287,147 $ 24,307,962 6/30/2004 $ 17,052,868 1,898,073 1,993,747 1,773,716 1,577,244 441,211 17,744 358,990 $ 25,113,593 Net Cost of Services 6/30/2003 (Restated) $ 12,989,259 1,696,829 1,829,320 1,787,493 595,771 378,193 13,950 287,147 19,577,962 6/30/2004 $ 13,449,658 1,634,208 1,881,340 1,718,100 681,412 371,966 17,140 358,990 20,112,814 6,512,823 6,.644,236 $ 13,065,139 $ 13,468,578 Table A-5 reflects the activities of the Food Service Program, the only business-type activity of the District. Tahle A-S Fiscal Years Ended June 30, 2004 and 2003 Business-type Activities Functlons/Programs Food services Add: investment earnings Total business-type activities Total Cost of Services 6/30/2003 6/30/2004 $ 922,037 $ 1,011,923 Net Cost of Services 6/30/2003 6/30/2004 $ 2,203 $ (31,747) 782 554 $ 2,985 $ (31,193) The Statement of Revenues, Expenses and Changes in Fund Net Assets for this proprietary fund will further detail the actual results of operations. 8 The District Funds At June 30, 2004, the District's governmental funds reported a combined fund balance of $10,591,762, which reflects an increase of $9,457,738 from June 30, 2003. The primary reason for this increase is the issuance of new General Obligation Debt in the amount of $9,945,000. General Fund Budget During the fiscal year, the Board of School Directors (Board) authorized revisions to the original budget to accommodate differences from the original budget to the actual expenditures of the District. All adjustments are again confirmed at the time the annual audit is accepted, which is after the end of the fiscal year and not prohibited by state law. A schedule showing the District's original and final budget amounts compared with amounts actually paid and received is provided in the financial statements. The District applied for Federal, state and local grants. These grants cannot always be anticipated in the budgeting process. Budgeted Revenues increased by $153,350 as a result of additional approved grants. Budgeted expenditures and other financing uses also increased by the same amount to compensate for the additional approved grants. Transfers between specific categories of expenditures/financing uses occur during the year. The most significant transfers are from the budget reserve to specific expenditures. Capital Asset and Debt Administration Capital Assets At June 30, 2004, the District had $20,261,510 invested in a broad range of capital assets, including land, buildings, furniture and equipment. Table A-6 Fiscal Years Ended June 30, 2004 and 2003 Capital Assets - Net of Depreciation pereentagc Govenunental Activities Business-Type Activities Total awu.. 6130103 6130104 6130103 6130104 6130103 6130104 2003.2004 Landandsite~ts $ 614,162 $ 587,929 $ $ $ 614,162 $ 587,929 -4.27% Bwldings and ~vements 16.263,523 15,709,121 16,263,523 15,709,12J -3.410/. F1D11iture and equipment 3,679,731 3,350,049 J05,I36 224,124 3,784,867 3,574,173 -5.570/. Construction-in-progress 614.411 614.411 100.00% $ 20,557,416 $ 20,261.510 $ 105.136 $ 224,124 $ 20,662,552 $ 20,485,634 -0.86% 9 Debt Administration As of July 1,2003, the District had total outstanding bond principal of $13,495,000. During the year, the District borrowed an additional $9,945,000 and made payments against principal of $1,185,000 resulting in ending outstanding debt as ofJune 30, 2004, of $22,255,000. Table A-7 Fiscal Years Ended June 30, 2004 and 2003 Outstanding Debt Governmental Activities Business-Type Activities Total 6130103 6130/04 6130103 6130104 6/30103 6130/04 General Obligation Bonds Series of 1997 $ 540,000 $ 130,000 $ $ $ 540,000 $ 130,000 Series of2oo1 3,155,000 2,405,000 3,155,000 2,405,000 Sericsof2oo1A 9,800,000 9,775,000 9,800,000 9,775,000 General Obligation Note Scriesof2oo3 9,945.000 39,746 26.498 39.746 9.971.498 $ 13,495.000 $ 22,255,000 $ 39,746 $ 26,498 $ 13,534,746 $ 22,281,498 Other obligations include accrued vacation-pay and sick-leave for specific employees of the District. More detailed information about our long-term liabjlities is included in Notes to the Financial Statements. Table A-8 reflects the comparison of revenue and expenditure categories by percentages. Table A-8 Revenues and Expenditures Local revenues States reveneus Federal revenues 2002-2003 53.9% 43.6% 2.5% 2003-2004 55.9% 41.3% 2.8% Instruction Support services Non-instructional/connnunity Facilities acquisition, construction and improvement services Debt service 63.0% 28.4% 1.7% 61.7% 27.6% 1.8% 0.2% 6.7% 2.3% 6.6% Contacting the District's Financial Management Our fmancial report is designed to provide our citizens, taxpayers, parents, students, investors and creditors with a general overview ofthe District's finances and to show the Board's accountability for the money it receives. If you have questions about this report or wish to request additional fInancial information, please contact Deborah Westover, Business Administrator/Board Secretary, at the Shippensburg Area School District, 317 North Morris Street, Shippensburg, P A 17257, (717) 530-2702. 10 pmentage Cha... 2003-2004 -75.93%. -23.77%. -O.26%. 24988.05% 64.62%. SIllPPENSBURG AREA SCHOOL DISTRICT STATEMENT OF NET ASSETS June 30, 2004 Governmental Business-Type ASSETS Activities Activities Total Current Assets Cash $ 5,239,546 $ 17,411 $ 5,256,957 Investments 6,560,011 6,560,011 Receivables Taxes - net of allowance for uncollectibles 1,090,687 1,090,687 Federal subsidies 252,350 7,958 260,308 State subsidies 166,327 1,001 167,328 Other 93,299 5,574 98,873 Internal balances 61,395 61,395 Inventories 28,901 28,901 Total current assets 13,463,615 60,845 13,524,460 Noncurrent Assets Bond issuance costs - net Land and improvements - net Building and improvements - net Furniture and equipment - net Construction-in-progress Total noncurrent assets 240,962 587,929 15,709,121 3,350,049 614,411 20,502,472 224,124 240,962 587,929 15,709,121 3,574,173 614,411 20,726,596 224,124 Total assets $ 33,966,087 $ 284,969 $ 34,251,056 See Notes to Financial Statements. 11 Governmental Business-Type LIABILITIES AND NET ASSETS Activities Activities Total Current Liabilities Accounts payable $ 766,441 $ 771 $ 767,212 Current portion of long-term debt 1,285,000 13,249 1,298,249 Accrued expenses Salaries and benefits 1,297,218 1,297,218 Payroll withholdings 367,317 367,317 Internal balances 61,272 61,272 Accrued interest payable 56,889 56,889 Deferred revenues 12,767 12,767 Unearned revenues 5,656 5,656 Total current liabilities 3,778,521 88,059 3,866,580 Noncurrent Liabilities General obligation debt 20,970,000 13,249 20,983,249 Compensated absences 854,183 854,183 Total noncurrent liabilities 21,824,183 13,249 21,837,432 Total liabilities 25,602,704 101,308 25,704,012 Net Assets (Deficit) Invested in capital assets - net of related debt (2,607,901) 197,626 (2,410,275) Restricted for: Capital reserve 68,479 68,479 Athletic 5,675 5,675 Unrestricted 10,897,130 (13,965) 10,883,165 Total net assets 8,363,383 183,661 8,547,044 Total liabilities and net assets $ 33,966,087 $ 284,969 $ 34,251,056 12 ] ~ " <;; 5 ~ >< " - ~ " ~z ~ .~ " " ~liJ e... <;;U z ... ~ ... rIJ .. 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" '" smpPENSBURG AREA SCHOOL DISTRICT BALANCE SHEET-GOVERNMENTAL FUNDS June 30, 2004 Capital Non-Major Total Projects Governmental Governmental General Construction Fwuls Funds ASSETS Cash $ 461,200 $ 4,479,409 $ 298,937 $ 5,239,546 Investtnents 1,544,952 5,015,059 6,560,011 Receivables Taxes - net of a\lowance for unco\lectibles 1,090,687 1,090,687 Federal subsidies 252,350 252,350 State subsidies 166,327 166,327 Other 93,299 93,299 Due from other funds 79,448 79,448 Total assets $ 3,688,263 $ 9,494,468 $ 298,937 $ 13,481,668 LIABILITIES AND FUND BALANCES Accounts payable $ 486,013 $ 274,281 $ 6,147 $ 766,441 Due to other funds 18,053 18,053 Accroed expenses Salaries and benefits 1,297,218 1,297,218 Payro\l withholdings 166,734 200,583 367,317 Deferred revenue 435,221 435,221 Uneamed revenue 5,656 5,656 Total liabilities 2,390,842 274,281 224,783 2,889,906 Fund Balances Reserved for Capital reserve 68,479 68,479 Athletic 5,675 5,675 Unreserved 1,297,421 9,220,187 10,517,608 Total fund balances 1,297,421 9,220,187 74,154 10,591,762 Total liabilities and fund balances $ 3,688,263 $ 9,494,468 $ 298,937 $ 13,481,668 See Notes to Financial Statements. 14 SHIPPENSBURG AREA SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS June 30, 2004 Total Fund Balances - Governmental Funds 10,591,762 Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital Assets used in governmental activities are not fmancial resources, and therefore, they are not reported as assets in governmental funds. The cost of assets is $34,528,194, including construction-in-progress in the amount of $614,411, and the accumulated depreciation is $14,266,684. Property taxes receivable will be collected this year, but are not available soon enough to pay for the current period's expenditures, and therefore, they are deferred revenues in the funds. Governmental funds report bond issuance costs as expenditures. However, in the Statement of Activities, the costs of issuance are allocated over the lives of the debt issues. This is the amount by which bond issuance costs exceed accumulated amortization. Long-term liabilities, including bonds payable and compensated absences, are not due and payable in the current period, and therefore, they are not reported as liabilities in the funds. Long-term liabilities at year-end consist of: Bonds payable (22,255,000) Accrued interest (56,889) Compensated absences (854,183) Total net assets - governmental activities See Notes to Financial Stateinents. 15 $ 20,261,510 435,221 240,962 (23,166,072) $ 8,363,383 SIDPPENSBURG AREA SCHOOL DISTRICT COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS Year Ended June 30, 2004 Capital Non-Major Total Projects Governmental Governmental General Construction Funds Funds Revenues Local sources $ 14,402,279 $ 49,556 $ 47,252 $ 14,499,087 State appropriations 10,724,549 10,724,549 Federal appropriations 731,739 731,739 Total revenues 25,858,567 49,556 47,252 25,955,375 Expenditures Instructional 16,270,553 16,270,553 Support services 7,193,092 94,234 8,021 7,295,347 Operation ofnon-iostructional services 316,581 150,253 466,834 Construction/improvement services 614,567 614,567 Debt service Principal 1,185,000 1,185,000 Interest 552,618 552,618 Total expenditures 25,517,844 708,801 158,274 26,384,919 Excess (deficiency) of revenues over expenditures 340,723 (659,245) (111,022) (429,544) Other Financing Sources (Uses) Bond proceeds 9,945,000 9,945,000 Refund of prior years' receipts (57,718) (57,718) Operating traosfers in 65,568 105,611 171,179 Operating traosfers out (105,611) (65,568) (171,179) Total other financing sources (uses) (97,761) 9,879,432 105,611 9,887,282 Net changes in fund balances 242,962 9,220,187 (5,411) 9,457,738 Fund Balances - July 1, 2003 1,054,459 79,565 1,134,024 Fund Balances - June 30, 2004 $ 1,297,421 $ 9,220,187 $ 74,154 $ 10,591,762 See Notes to Financial Statements. 16 SHIPPENSBURG AREA SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES Year Ended June 30, 2004 Net change in fund balances - total governmental funds $ 9,457,738 Amounts reported for governmental activities in the Statement of Activities are different because: Capital outlays are reported in governmental funds as expenditures. However, in the Statement of Activities, the costs of those assets are allocated over their useful lives as depreciation expense. This is the amount by which depreciation exceeds capital outlays in the period. Capital outlays 860,603 Less depreciation expense (905,175) (44,572) Because some property taxes will not be collected for several months after the District's fiscal year ends, they are not considered as "available" revenues in the governmental funds. Deferred tax revenues decreased by this amount this year. (31,073) Interest on long-term debt in the Statement of Activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the Statement of Activities, interest expense is recognized as the interest accrues, regardless of when it is due. The additional interest accrued in the Statement of Activities over the amount due is shown here. 5,242 Some expenses reported in the Statement of Activities do not require the use of current financial resources, and therefore, they are not reported as expenditures in governmental funds. (79,252) The issuance of long-term debt provides current fmanciaI resources to governmental funds, while the repayment of the principal of long- term debt conswnes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. Issuance of long-term debt (9,945,000) Repayment of long-term debt 1,185,000 Amortization of bond issuance costs 74,240 (8,685,760) Change in net assets or governmental activities $ 622,323 See Notes to Financial Statements. 17 SHIPPENSBURG AREA SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL - GENERAL FUND Year Ended June 30,2004 Variance with Final Budgeted Amounts Budget Favorable Original Final Actual (Unfavorable ) Revenues Local sources $ 14,704,786 $ 14,781,503 $ 14,402,279 $ (379,224) State appropriations 10,830,777 10,858,661 10,724,549 (134,112) Federal appropriations 692,287 743,036 731,739 (11,297) Total revenues 26,227 ,850 26,383,200 25,858,567 (524,633) Expenditures Instructional 16,264,155 16,369,660 16,270,553 99,107 Support services 7,348,496 .7,386,828 7,193,092 193,736 Operation of noninstructionaI services 307,167 318,679 316,581 2,098 Debt service 1,988,744 1,931,026 1,737,618 193,408 Total expenditures 25,908,562 26,006,193 25,517,844 488,349 Excess of revenues over expenditures 319,288 377,007 340,723 (36,284) Other Financing Sources (Uses) Refund of prior years' receipts (57,718) (57,718) OPerating transfers in 65,568 65,568 Operating transfers out (105,611) (105,611) (105,611) Budgetary reserve (60,722) (60,722) 60,722 Total other financing uses (166,333) (224,051) (97,761) 126,290 Net cbanges in fund balance $ 152,955 $ 152,956 242,962 $ 90,006 Fund Balance. July 1, 2003 1,054,459 Fund Balance - June 30, 2004 $ 1,297,421 See Notes to Financial Statements. 18 SHIPPENSBURG AREA SCHOOL DISTRICT STATEMENT OF NET ASSETS- PROPRIETARY FUND - FOOD SERVICE June 30, 2004 ASSETS Current Assets Cash $ 17,411 Receivables Federal subsidies 7,958 State subsidies 1,001 Other 5,574 fuventories 28,901 Total current assets 60,845 Noncurrent Assets Furniture and equipment. net 224,124 Total assets $ 284,969 LIABILITIES AND NET ASSETS Current Liabilities Accounts payable $ 771 Current portion oflong-term debt 13,249 Due to other funds 61,272 Deferred revenues 12,767 Total current liabilities 88,059 Noncurrent Liabilities General obligation note 13,249 Total liabilities 101,308 Net Assets fuvested in capital assets - net of related debt 197,626 Unrestricted (13,965) Total net assets 183,661 Total liabilities and net assets $ 284,969 See Notes to Financial Statements. 19 SIDPPENSBURG AREA SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENSES AND CHANGE IN NET ASSETS- PROPRIETARY FUND - FOOD SERVICE Year Ended June 30, 2004 Operating Revenues Food service revenue $ 652,394 Operating Expenses Labor, taxes and benefits 471,819 Professional and technical services 8,375 Disposal services 2,176 Electricity 20,000 Equipment repairs and maintenance 10,020 Extermination services 1,080 Advertising 476 Printing and binding 1,455 Travel 918 Supplies 27,721 Food and milk 391,339 Donated commodities used 47,102 Depreciation 27,210 Dues and fees 968 Total operating expenses 1,010,659 Operating loss (358,265) Nonoperating Revenues (Expense) fuvestment income 554 Federal subsidies 232,702 State subsidies 47,978 Value of donated commodities 47,102 futerest expense (1,264) Total nonoperating revenues 327,072 Change in net assets (31,193) Net Assets - July I, 2003, as previously stated 68,656 Priorperioda~ustment 146,198 Net Assets. July 1,2003, restated 214,854 Net Assets - June 30, 2004 $ 183,661 See Notes to Financial Statements. 20 SIDPPENSBURG AREA SCHOOL DISTRICT STATEMENT OF CASH FLOWS- PROPRIETARY FUND - FOOD SERVICE Year Euded Juue 30, 2004 Cash Flows From Operating Activities Cash received from meal sales Cash payments for goods and services Cash payments to employees for services Net cash used in operating activities $ 652,394 (437,021) (471,819) (256,446) 232,702 47,978 280,680 (13,248) (1,264) (14,512) 554 10,276 7,135 $ 17,411 Cash Flows From Noncapital Financing Activities Federal subsidies State subsidies Net cash provided by noncapital financing activities Cash Flows From Capital and Related Financing Activities Principal paid on financing agreements Interest paid on fmancing agreements Net cash used in capital and related financing activities Cash Flows From Investing Activities Investment income Net increase in cash Cash: July 1,2003 June 30, 2004 (Continued) 21 smpPENSBURG AREA SCHOOL DISTRICT STATEMENT OF CASH FLOWS- PROPRIETARY FUND - FOOD SERVICE (Continued) Year Ended June 30, 2004 Reconciliation of Operating Loss to Net Cash Used in Operating Activities Operating loss Adjustments to reconcile operating loss to net cash used in operating activities Depreciation Value of donated commodities Changes in assets and liabilities: (Increase) decrease in: Receivables Inventories (Decrease) increase in: Accounts payable Deposits payable Due to other funds Deferred revenues Net cash used in operating activities $ (358,265) 27,210 47,102 (6,723) (116) (128) 1,815 32,590 69 $ (256,446) See Notes to Financial Statements. 22 SmPPENSBURG AREA SCHOOL DISTRICT STATEMENT OF FIDUCIARY NET ASSETS June 30, 2004 Combined Activity Funds ASSETS Cash Accounts receivable Total assets $ 87,339 8 87,347 $ LIABILITIES Due to General Fund Due to student groups Total liabilities $ $ 123 87,224 87,347 See Notes to Financial Statements. 23 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 1. Summary of Significant Accounting Policies The Shippensburg Area School District operates two elementary schools, one middle school and one high school in Shippensburg, Pennsylvania. The District operates under current standards prescribed by the Pennsylvania Department of Education in accordance with the provisions of the School Laws of Pennsylvania. The District operates under a locally-elected, nine-member Board form of government. The fmancial statements of Shippensburg Area School District (the District) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the authoritative standard-setting body for the establishment of governmental accounting and financial reporting principles. The more significant of these accounting policies are as follows: A. Reporting Entity The Shippensburg Area School District's financial statements include the operations of all entities for which the School Board exercises oversight responsibility. Oversight responsibility is demonstrated by fmancial interdependency, selection of governing authority, designation of management, ability to significantly influence operations, and accountability for fiscal matters. The Shippensburg Area School District is the lowest level of government which has oversight responsibility and control over all activities related to public school education in the Commonwealth of Pennsylvania. The District receives funding from local, state and Federal government sources and must comply with the requirements of these funding-source entities. However, the District is not included in any other governmental "reporting entity" since the School Board members are elected by the public and have decision-making authority, the power to designate management, the ability to significantly influence operations and primary accountability for fiscal matters. Additionally, the District does not exercise oversight responsibility over any other entities, and consequently, no other entities have been included in the accompanying fmancial statements. B. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the Statement of Net Assets and the Statement of Activities) report information on all of the non-fiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally- separate component units for which the primary government is financially responsible. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include I) charges to customers or applicants who purchase, use or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other iterns not included among program revenues are reported as general revenues. 24 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note!. Summary of Significant Accounting Policies (Continued) B. Government-wide and Fund Financial Statements (Continued) Separate-fund financial statements are provided in the report for all of the governmental, proprietary, and fiduciary funds of the District, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Non-Major funds are aggregated and presented in a single column. Fiduciary funds are reported by fund type. C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The District complies with accounting principles generally accepted in the United States of America (GAAP) and applies all relevant Governmental Accounting Standards Board (GASB) pronouncements. The government-wide financial statements are reported using the economic-resources measurement focus and the accrual basis of accounting, as are the proprietary and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenues as soon as all eligibility requirernents 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 staternent includes all transactions and events that increased or decreased net assets. Depreciation is charged as expense against current operations and accumulated depreciation is reported on the Statement of Net Assets. Governmental-fund financial statements are reported using the current financial-resources measurement focus and the modified-accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Revenues from Federal, state and other grants designated for payment of specific School District expenditures is recognized when the related expenditures are incurred; accordingly, when such funds are received, they are recorded as deferred revenues until earned. Expenditures generally are recorded when liabilities are incurred, as under accrual accounting. However, debt-service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. When both restricted and unrestricted resources are available for use, it is the District's policy to use restricted resources first, then unrestricted resources as they are needed. Governmental Funds are those through which most governmental functions of the District are financed. The acquisition, use and balances of the District's expendable financial resources and related liabilities (except those accounted for in proprietary funds) are accounted for through Governmental Funds. 25 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note), Summary of Significant Accounting Policies (Continued) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) The District reports the following major governmental funds: The General Fund is the District's primary operating fund. It accounts for all financial resources except those required to be in another fund. Revenues are primarily derived from local property, earned income, per capita and occupational taxes, and state and Federal distributions. Many of the more important activities of the District, including instruction, administration of the District and certain non-instructional services are accounted for in this fund. The Capital Projects Fund is used to account for financial resources available for the acquisition or construction of major capital facilities (other than those fmanced by proprietary funds). The District operates one enterprise fund, the Food Service Fund. This fund accounts for the activities of the District's food service program. Additionally, the District reports the following non-major governmental funds: The Athletic Funds are authorized by Section 511 of the Public School Code of 1949 to account for the revenues and expenditures of athletic activities. The funds account for gate receipts and other revenues from athletic events and certain budgeted costs of the District's athletic programs. The Capital Reserve Fund (Section 2932 is authorized by P.L. 145, Act of April 30, 1943, known as Section 2932 School Laws of Pennsylvania) accounts for (1) monies transferred during any fiscal year from appropriations made for any particular purpose which may not be needed, and (2) surplus monies in the General Fund of the District at the end of any fiscal year. This fund is included in the financial statements as a Special Revenue Fund. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with the proprietary fund's principal on-going operations. The principal operating revenues of the District's enterprise fund are food service charges. Operating expenses for the District's enterprise fund include food production costs, supplies, administrative costs, and depreciation on capital assets. All revenues or expenses not meeting this defmition are reported as nonoperating revenues and expenses. The District does not attempt to allocate "building-wide costs" to the Food Service Fund. Thus, General Fund expenditures which partially benefit the Food Service Fund (utilities, janitorial services, insurance, etc.) are not proportionately recognized within the Food Service Fund; similarly, the Food Service Fund does not recognize a cost for the building space it occupies (no rental-of-facilities expense). The Activity Funds account for the monies authorized by Section 511 of the Public School Code of 1949 for school publications and organizations. A portion of the Activity Funds is an Agency Fund which is separate from other Agency Funds because of legal requirements. Agency Funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Agency Funds are also accounted for using the modified-accrual basis of accounting. 26 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note I. Summary of Significant Accounting Policies (Continued) D. Budgets and Budgetary Accounting An operating budget is adopted prior to the beginning of each year for the General Fund on a modified- accrual basis of accounting. The General Fund is the only fund for which a budget is legally required. The Pennsylvania School Code dictates specific procedures relative to adoption of the District's budget and reporting of its financial statements: The District, before levying annual school taxes, is required to prepare an operating budget for the succeeding fiscal year. The District is required to publish notice by advertisement, at least once in two newspapers of general circulation in the municipality in which it is located, and within fifteen days of final action, that the proposed budget has been prepared and is available for public inspection at the administrative office of the District. Notice that public hearings will be held on the proposed operating budget must be included in the advertisement; such hearings are required to be scheduled at least ten days prior to when final action on adoption is taken by the Board. Legal budgetary control is maintained at the sub-function/major-object level. The Board of School Directors may make transfers of funds appropriated to any particular item of expenditure by legislative action in accordance with the Pennsylvania School Code. Management may amend the budge! at the sub- function/sub-object level without Board approval. Appropriations lapse at the end of the fiscal period. Budgetary information reflected in the financial statements is presented at or below the level of budgetary control and includes the effect of approved budget amendments. E. Assets, Liabilities, and Net Assets or Equity Cash and Cash E<luivalents: For purposes of the Statement of Cash Flows presented for the proprietary fund, the District considers all highly-liquid investments with maturities of three months or less when purchased to be cash equivalents. Investments: Investments are stated at market value. Allowance for Estimated Uncollectible Taxes and Deferred Revenues: The allowance for estimated uncollectible taxes is based upon an historical estimate of delinquent taxes that will not be received within one year of the fiscal year-end. Deferred revenues are based upon an historical estimate of delinquent taxes expected to be received within one year of the fiscal year-end. The portion of taxes receivable which is expected to be received within sixty days of June 30 is recorded as revenue in the current year. The remaining amount of taxes receivable which is expected to be received within one year from June 30 is recorded as deferred revenues. All other amounts in taxes receivable are written off as estimated uncollectible taxes. 27 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note I. Summary of Significant Accounting Policies (Continued) E. Assets, Liabilities, and Net Assets or Equity (Continued) Inventories: On government-wide financial statements, inventories are presented at the lower of cost or market on a first-in, first-out basis, and are expensed when used. A physical inventory of the Food Service Fund's food and supplies was taken as of June 30, 2004. The inventory consisted of government-donated commodities which were valued at estimated fair market value, and purchased commodities and supplies, valued at cost using the first-in, ftrst-out (FIFO) method. The District has adopted an inventory recordkeeping system which does distinguish between donated and purchased commodities. Accordingly, deferred revenues for donated commodities has been recorded. Capital Assets and Depreciation: Capital assets, which include property, plant and equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities column in the government-wide financial statements. Capital assets are capitalized at the discretion of management, unless the assets are acquired by debt proceeds, in which case the assets must be capitalized. Management considers various factors in the capitalization of assets, including the assets' estimated useful lives, costs, and the extent to which the assets are part of a larger capital project. The District's capital assets include library books, classroom texts, computer equipment, classroom furniture, and other instructional equipment, subject to the on-going discretion of management. The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend asset lives are not capitalized. Depreciation is provided for fixed assets on the straight-line basis over the estimated useful lives of the assets or groups of assets as determined by management. Long-Term Obligations: In the government-wide financial statements, and in the proprietary fund type in the fund fmancial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental or business-type activity columns in the Statement of Net Assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the lives of the issues using the effective interest method. Bonds payable are reported net of applicable bond premiums or discounts. Bond issuance costs are reported as deferred charges and amortized over the terms of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of the debt issued is reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Comoensated Absences: Under the system of financial accounting and reporting for Pennsylvania School Systems, the District accrues certain accumulated employee benefits, such as unpaid vacation and sick pay. Calculation of this amount is determined by the appropriate vacation, sick and retirement lump-sum payments which would be available to employees if they would leave or retire from the District and is adjusted for expected turnover rates of employees. Accrued benefit days, multiplied by appropriate salary amounts, are reflected as a long-term liability unless retirements are likely within the upcoming fiscal year. Those costs determined to be current year costs are reflected as a liability of the General Fund. As of June 30, 2004, this liability is $854,183. 28 SIllPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note I. Summary of Significant Accounting Policies (Continued) E. Assets, Liabilities, and Net Assets or Equity (Continued) Transfers: Advances between funds that are not expected to be repaid are accounted for as transfers. In those cases when repayment is expected, the advances are accounted for through the various "due from" and "due to" accounts. Fund Balance: The District classifies fund balances as follows: Reserved Reserved is used to denote that portion of the fund balance, which is not available for expenditure appropriation or is legally segregated for a specific purpose. . Reserved for athletics represents that portion of fund balance legally restricted to athletic programs. . Reserved for capital reserve represents that portion of fund balance legally restricted to capital projects. Unreserved . Designated is used to indicate intentions for financial resource utilization. . Undesignated is used to denote that portion of fund balance which is available for appropriations. Use of Estimates: Management uses estimates and assumptions in preparing financial statements. These estimates and assumptions affect the reported amounts of assets and liabilities and the reported revenue, expenditures and disclosures. Total Columns on Combininl! Governmental Fund Statements: Total columns on the combining govemmental-fund financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns does not present financial position, results of operations or cash flows, in conformity with accounting principles generally accepted in the United States of America. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. 29 SHlPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 2. Change in Accounting Principle During the year ended June 30, 2004, the District adopted Staternent of Governmental Accounting Standards (SGAS) No. 39, Determining Whether Certain Organizations are Component Units, an amendment to SGAS No. 14. Adoption of this pronouncement is predicated upon management's belief that the District is a legally-separate, tax-exempt entity. Adoption of SGAS No. 39 did not require restatement of financial position, results of operations or cash flows as of June 30, 2003. Note 3. Deposits and Investments Under Section 440.1 of the Public School Code of 1949, as amended, the District is permitted to invest funds consistent with sound business practices in the following types of investments: . U. S. Treasury Bills. . Short-term obligations of the U. S. Government or its agencies or instrumentalities. . Deposits in savings accounts, time deposits or share accounts of institutions insured by: I. The Federal Deposit fusurance Corporation (FDIC), or 2. The Federal Savings and Loan fusurance Corporation, or 3. The National Credit Union Share fusurance Fund to the extent that such accounts are so insured, and for any amounts above maximum insurable limits, provided that approved collateral as provided by law shall be pledged by the depository. . Obligations of (a) the United States of America or its agencies or instrumentalities backed by the full faith and credit of the United States of America, and (b) the Commonwealth of Pennsylvania or instrumentalities thereof backed by the full faith and credit of these political subdivisions. . Shares of investment companies whose investments are restricted to the above categories. The deposit and investment policy of the District adheres to state statutes and prudent business practices. There were no deposit or investment transactions during the year that were in violation of either state statutes or the policy of the District. Denosits The District's carrying amount of cash deposits at June 30, 2004, for all funds amounted to $5,344,296. Of the total bank balance of $5,435,177, $100,000 was covered by Federal depository insurance. The remainder of $5,335,177 is covered by pooled collateral maintained in conformity with Act 72. Act 72 is an act standardizing the procedures for pledges of assets to secure deposits of public funds with banking institutions pursuant to other laws; establishing a standard rule for the types, amounts, and valuations of assets eligible to be used as collateral for deposits of public funds; permitting assets to be pledged against deposits on a pooled basis; and authorizing the appointment of custodians to act as pledgees of assets. The carrying amount of cash and investments as presented on the balance sheet includes petty cash of $1,000. 30 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 3. Deposits and Investments (Continued) Investments GASB #3, Deposits with Financial Institutions, Investments, and Reverse Repurchase Agreernents, requires the disclosure of carrying amounts and market values by the following categories: Category I is insured or registered securities held by the District or its agent in the District's name. Registered securities are those registered in the District's name. Category 2 is uninsured and unregistered, with securities held by the counterparty's trust department or its agent in the District's name. Category 3 is uninsured and unregistered, with securities held by the counterparty or by its trust department or agent but not in the District's name. The District invests in the Pennsylvania School District Liquid Asset Fund (pSDLAF) and the Pennsylvania Local Government Investment Trust (pLGIT) as authorized by the Board. PSDLAF was established to enable school districts to pool funds for investment in instruments authorized by Section 440.] of the Pennsylvania Schoo] Code of ]949, as amended. PLGIT assures that it will not place deposits with any single-issuing institution if the largest participant's share exceeds $]00,000, unless such deposits are collateralized as prescribed by Act 72 of the Commonwealth of Pennsylvania. These funds have the characteristics of open-end mutua] funds and are not subject to credit-risk classification. At June 30, 2004, the investments of the District were classified as follows: 1 Category 2 3 Non- Categorized Orrstown Bank U. S. Government Securities $ $ $ $ 6,560,011 3] SIllPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 4. Taxes Receivable, Deferred Revenues and Estimated Uncollectible Taxes A summary of the taxes receivable and related accounts at June 30, 2004, follows: Uncollected taxes - real estate Uncollected taxes - personal Interest and commissions - net Earned income taxes Realty transfer taxes Taxes Receivable - Net Taxes to be collected within 60 days Deferred revenues - delinquent taxes Allowance for uncollectible taxes Taxes Receivable - Net Deferred Revenue - General Fund Delinquent taxes Deferred Revenue - Food Service Fund Student deposits Donated commodities Note 5. Interfnnd Accounts Individual fund receivable and payable balances at June 30, 2004, are as follows: General Fund Payroll Food Service Middle School Activity Interfund Receivables $ 79,448 $ 79,448 Amount $ 609,025 19,796 1l,794 412,633 37,439 $ 1,090,687 $ 661,804 435,221 (6,338) $ 1,090,687 $ 435,221 $ 6,082 6,685 $ 12,767 Interfund Payables $ 18,053 61,272 123 $ 79,448 32 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 5. Interfund Accounts (Continued) Individual fund transfer activity at June 30, 2004, is as follows: General Construction Senior High Athletic Middle School Athletic Transfers In $ 65,568 Transfers Out $ 105,611 65,568 78,343 27,268 $ 171,179 $ 171,179 Note 6. Food Service Fund Inventory The composition of Food Service Fund inventory at June 30, 2004, is as follows: Materials and supplies Purchased food Donated food Amount $ 5,893 16,323 6,685 $ 28,901 Note 7. Property Taxes Property taxes are levied on July 1 st. Taxes are collected at a discount until August 31 st, at their face amount from September 1st until October 31st, and include a penalty thereafter. The taxes are billed and collected by elected tax collectors. The County Tax Bureaus collect delinquent real estate taxes for the District. 33 SHlPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 8. General Fixed Assets Capital asset activity for the year ended June 30, 2004, was as follows: July 1, 2003 Inereases Decreases June 30, 2004 Governmental AcUVIUes Land and site improvements $ 929,939 $ $ $ 929,939 Buildings and improvements 25,485,158 25,485,158 Furniture and equipment 8,017,456 (518,770) 7,498,686 Construction-in-progress 614,411 614,411 Total Governmental Activities Assets 34,432,553 614,411 (518,770) 34,528,194 Less accumulated depreciation Land and site improvements 315,777 26,233 342,010 Buildings and improvements 9,221,635 554,402 9,776,037 Furniture and equipment 4,337,725 (189,088) 4,148,637 Total accumulated depreciation 13,875,137 580,635 (189,088) 14,266,684 Governmental Activities, Capital Assets - Net $ 20,557,416 $ 33,776 $ (329,682) $ 20,261,510 Business-Type Activities Machinery and equipment $ 457,921 $ 223,996 $ $ 681,917 Accumulated depreciation (352,785) (105,008) (457,793) Business-Type Activities, Capital Assets - Net $ 105,136 $ 118,988 $ $ 224,124 Depreciation expense was charged to the functions/programs of the District as follows: Amount Governmental Activities Instruction Instructional student support Administration and financial support Operation and maintenance of plant services Student activities Community services Total governmental activities Business-Type Activities Food Service Total School District $ 691,066 72,387 77,454 37,704 26,148 416 905,175 $ 27,210 932,385 34 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 9. Accrued Salaries and Benefits Accrued salaries and benefits at June 30, 2004, consist of the following: Accrued salaries Retirement Social security Workers' compensation Amount $ 1,153,408 47,216 87,943 8,651 $ 1,297,218 Accrued salaries represent teachers' salaries earned during the 2003-04 school year which will be paid subsequent to June 30, 2004. Accrued retirement represents the public school employees' retirement board contribution for the second quarter of calendar year 2004, including the portion pertaining to accrued salaries at June 30, 2004. Accrued social security represents the District's liability arising from accrued salaries at June 30, 2004. Note 10. Long-Term Debt During the fiscal year ended June 30, 2004, general long-term debt changed as follows: Balances Balances July I, 2003 Increase Decrease June 30, 2004 Governmental Activities General Long-Term Obligations: General Obligation Bonds - Series of 1997 $ 540,000 $ $ 410,000 $ 130,000 General Obligation Bonds - Series of 200 1 3,155,000 750,000 2,405,000 General Obligation Bonds - Series A of 200 1 9,800,000 25,000 9,775,000 General Obligation Note - Series of 2003 9,945,000 9,945,000 Compensated absences payable 774,931 79,252 854,183 $ 14,269,931 $ 10,024,252 $ 1,185,000 $ 23,109,183 Business-Type Activities General Obligation Note - Series of 2003 $ 39,746 $ $ 13,248 $ 26,498 35 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 10. Long-Term Debt (Continued) General Obligation Bonds - Series of 1997 - On December 3, 1997, the District issued General Obligation Bonds in the principal amount of $11 ,080,000. The bonds bear annual interest rates ranging from 4.00% to 5.10%. Interest is payable semi-annually on November 15 and May 15, and the bonds mature serially in amounts ranging from $130,000 to $410,000 through November 15, 2004. These bonds were partially refinanced with General Obligation Bonds - Series A of 200 1. General Obligation Bonds - Series of 2001 - On September 1, 2001, the District issued General Obligation Bonds in the principal amount of $4,500,000. The bonds bear annual interest rates ranging from 2.60% to 3.65%. Interest is payable semi-annually on November 15 and May 15, and the bonds mature serially in amounts ranging from $615,000 to $830,000 through November 15, 2006. General Obligation Bonds - Series A of 2001 - On October 15, 2001, the District issued General Obligation Bonds in the principal amount of $9,805,000. The bonds bear annual interest rates ranging from 2.40% to 4.20%. Interest is payable semi-annually on November 15 and May 15, and the bonds mature serially in amounts ranging from $5,000 to $1,660,000 through November 15, 2012. General Obligation Note - Series of 2003 - On December 30, 2003, the District obtained secured financing from the New Garden General Authority in the principal amount of $9,945,000. Principal payments are due annually, with interest due monthly at a variable rate not to exceed 12.00%. General Obligation Note - Series of 2003 - On January 23, 2003, the District obtained financing from Orrstown Bank in the principal amount of $52,995. The note bears interest at a tax-free fixed rate of 3.125%. Interest is payable quarterly on September 1, December 1, March 1 and June 1, and requires an annual principal payment of $13,249 through June 1,2006. The District is in compliance with all debt covenants of the outstanding bond issues. Those covenants include the following: the District shall include the annual debt service in its budget for the fiscal year, shall appropriate these amounts from its general revenues, and shall punctually cause the payment of the principal and interest of each of the bonds. 36 SIllPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 10. Long-Term Debt (Continued) Maturities of the long-term debt issues are as follows: Year Ending Governmental Activities June 30, Principal Interest Total 2005 $ 1,285,000 $ 1,531,298 $ 2,816,298 2006 1,565,000 1,567,508 3,132,508 2007 1,625,000 1,491,730 3,116,730 2008 1,685,000 1,411,953 3,096,953 2009 1,745,000 1,327,828 3,072,828 2010-2014 6,935,000 5,287,420 12,222,420 2015-2019 1,835,000 3,896,350 5,731,350 2020--2024 2,240,000 2,674,600 4,914,600 2025-2029 2,730,000 1,182,900 3,912,900 2030 610,000 30,500 640,500 $ 22,255,000 $ 20,402,087 $ 42,657.087 $ Principal 13,249 13,249 Business~type Activities Interest $ 828$ 414 Total 14,077 13,663 $ 26,498 $ 1,242 $ 21.740 Comoensated Absences - Under the terms of the District's employment policies, employees are reimbursed for accrued vacation upon retirement or other termination of employment. The reimbursement rate is established by the employment contract and varies by employee classification. In addition, employees are granted sick days per school year and any unused sick days are permitted to be carried over to future years. Upon retirement from the District, employees are reimbursed for accumulated sick days equal to the number of unused days multiplied by an amount per the employment contract. The employees are also offered options regarding retirement payouts as prescribed in the contract if certain conditions are met. For the year ended June 30, 2004, benefits attributed to employees retiring during the 2003-04 year amounted to $65,468 for 11 participants. The total liability for accrued vacation, sick leave and retirement bonuses at June 30, 2004, has been reflected in the Statement of Net Assets and totals $854,183. Note 11. Post-Employment Benefits Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), the District provides healthcare benefits to eligible former employees and their dependents. Requirements are outlined by the Federal Govemment for this coverage. The premium plus a 2% administrative fee is paid in full by the eligible participant. This program is offered for a duration of up to 18 months or 36 months after an employee's termination date. At June 30, 2004, there were 13 participants covered under COBRA. 37 SIllPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 12. Defined-Benefit Pension Plan Plan Descriotion: The District contributes to the statewide Public School Employees' Retirement System (the Systern), a governmental, cost-sharing, multiple-employer, defmed-benefit plan administered by the System. In. addition to regular retirernent benefits, the Systern also provides for disability, legislatively-mandated ad hoc cost-of-living adjustments, and healthcare insurance premium assistance to qualifYing annuitants. Membership in the Systern is mandatory for substantially all full-time public school employees in the Commonwealth of Pennsylvania (Commonwealth). State statutes assign the authority to establish and amend benefit provisions of the Pennsylvania Public School Employees' Retirement Code (the Code) to the Pennsylvania General Assembly (Act No. 96 of October 2,1975, as amended),(24 Pa. C.S. 8101- 8535). The Public School Employees' Retirement System issues a publicly-available comprehensive annual financial report that includes fmancial statements and required supplernentary information for the plan. This report may be obtained by writing to Barbara D. Flurie, Office of Financial Managernent, Public School Employees' Retirement System of Pennsylvania, P.O. Box 125, Harrisburg, Pennsylvania, 17108-0125. This report is also available in the Publications Section of the PSERS website at www.psers.state.pa.us. Fundimr Policv: The contribution policy is established by the Public School Employees' Retirement Code and requires contributions by the active members, the District and the Commonwealth. Contribution Rates: The current contribution rate for active members joining the System before July 22, 1983, is set by law at 5.25% or at 6.50% of the member's qualifying compensation. For active mernbers joining the System on or after July 22, 1983, and who were active or inactive as ofJuly 1, 2001, the rate of contribution is 6.25% or 7.50% of the mernber's qualifying compensation. Members who joined the System after June 30, 2001, contribute at 7.50%. For all new hires, the higher contribution rates began with service rendered on or after January I, 2002. District Contributions: The District's required contributions are based upon an actuarial valuation. For the fiscal year ended June 30, 2004, the District's rate of contribution was 3.77% of covered payroll. The 3.77% rate is composed of a pension contribution rate of 2.98% for pension benefits and 0.79% for healthcare insurance premium assistance. The District is required to pay the entire contribution and will be reimbursed by the Commonwealth in an amount equal to the Commonwealth's share as determined by the income-aid ratio (as defined in Act 29 of 1994), which is at least one-half of the total District's rate. The District's contributions to the Plan for the years ended June 30, 2004, 2003 and 2002, were $530,915, $156,031 and $152,183, respectively, and are equal to the required contributions for each year. 38 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 13. Participation in Risk Sharing Pool The District is a participant in a risk sharing pool to provide workers' compensation coverage. The expense for this coverage for the 2003-04 year was $114,697, comprised of a self-insured retention of $15,039 and a contribution to the Central Fund of $99,658. Actual claims during the year are first paid out of the self-insured retention. Claims that exceed the self-insured retention are satisfied by the Central Fund. The Central Fund maintains excess insurance to cover any claims that exceed $400,000 per accident. There are approximately 79 districts participating in the pool. If there is a deficiency in the pooled funds, each member is assessed a proportionate share of the deficiency. Upon withdrawal by a member from the pool, the terminating member has no rights to funds in the pool. Note 14. Risk Management The District is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets and errors or omissions. Significant losses are covered by commercial insurance for all major programs. For insured programs, there have been no significant reductions in settlement coverage. Settlement amounts have not exceeded insurance coverage for the current year or the three prior years. Note IS. Prior Period Adjnstment The District has restated its net assets at July 1, 2003, to include food-service equipment (net of allowable depreciation) in the amount of $146,198 that was purchased through the General Fund during prior years. The adjustment increases food-service net assets at July 1,2003, by $146,198. The General Fund's net assets were decreased at July 1, 2003, by $251,334 (net of allowable depreciation). Note 16. Subsequent Event On October 1, 2004, the District will issue General Obligation Bonds - Series of 2004 in the principal amount of $15,420,000. The bonds bear annual interest rates ranging from 2.05% to 4.45%. Interest is payable semi-annually on November 15 and May 15, and the bonds mature serially in amounts ranging from $5,000 to $2,035,000 through November 15, 2020. The proceeds of the bonds will be applied towards payment of the costs of: (1) planning, designing, acquiring, constructing, furnishing, and equipping a new school building for fourth and fifth grades; (2) planning, designing, acquiring, constructing, furnishing, and equipping additions and improvements to James Burd Elementary and Nancy Grayson Elementary; (3) issuing and insuring the Bonds; and (4) other capital improvements. 39 SHIPPENSBURG AREA SCHOOL DISTRICT GENERAL FUND - SCHEDULE OF REVENUES Year Ended June 30, 2004 Revenues Local sources Real estate taxes Current Interim Public utility tax Payments in lieu of taxes Current per capita taxes 679 5II Occupational privilege tax Earned income tax Real estate transfer taxes Delinquent real estate taxes Delinquent per capita taxes 679 5II Delinquent occupation tax Interest IDEA Rentals Tuition Reading recovery Refunds and other miscellaneous revenue Total revenues from local sources State appropriations Basic instructional subsidy Charter schools Section 1305 and 1306 Homebound instruction V ocationaI education Altemative education Driver education Special education Transportation $ 10,092,086 33,341 21,860 6,262 49,277 49,277 61,336 2,553,441 337,761 686,767 5,467 5,467 14,440 29,167 288,225 896 39,838 1,240 126,131 14,402,279 6,644,236 8,395 35,764 816 27,037 16,384 3,150 1,522,636 895,832 (Continued) 40 SHIPPENSBURG AREA SCHOOL DISTRICT GENERAL FUND - SCHEDULE OF REVENUES (Continued) Year Ended June 30, 2004 Revenues (Continued) State appropriations (Continued) Rentals and sinking fund payments Health services Social security reimbursement Retirement reimbursement Extra grants 677,167 72,584 535,944 273,320 II ,284 10,724,549 503,889 14,334 159,830 8,623 i3,327 18,6II 13,125 731,739 65,568 $ 25,924,135 Total state appropriations Federal appropriations Title I - Grants to Local Educational Agencies Title II - Education Technology Title II -Improving Teacher Quality Title V - Innovative Education Safe and Drug-free Schools and Communities Medical Assistance Program Weathemet Equipment Grant Total Federal appropriations Other Financing Sources Operating transfers in Total revenues 41 SHIPPENSBURG AREA SCHOOL DISTRICT GENERAL FUND - SCHEDULE OF EXPENDITURES Year Ended June 30, 2004 Expenditures Instructional Regular programs Salaries Employee benefits Purchased services Professional and technical Property Other Supplies Property Other objects $ 7,967,118 1,825,377 45,848 105,163 451,165 341,523 40,851 2,226 10,779,271 1,919,288 508,983 1,029,956 42,048 21,961 3,507 150 3,525,893 360,673 72,932 385 619,345 18,100 340 518 1,072,293 Total regular programs Special programs Salaries Employee benefits Purchased services Professional and technical Other Supplies Property Other objects Total special programs Vocational education programs Salaries Employee benefits Purchased services Property Other Supplies Property Other objects Total vocational education programs (Continued) 42 SHIPPENSBURG AREA SCHOOL DISTRICT GENERAL FUND - SCHEDULE OF EXPENDITURES (Continued) Year Ended June 30, 2004 Expenditures (Continued) Instructional (Continued) Other instructional programs Salaries Employee benefits Purchased services Professional and technical Property Other Supplies 649,601 129,090 45,981 25 2,153 411 Total other instructional programs 827,261 Adult education programs Salaries Employee benefits Purchased services Other Supplies Other objects 45,482 11,784 884 867 260 Total adult education programs 59,277 Community college education program 6,558 Total instructional 16,270,553 Support Services Pupil personnel Salaries Employee benefits Purchased services Professional and technical Property Other Supplies Property Other objects 502,510 116,579 194,692 244 5,105 6,749 6,686 883 Total pupil personnel 833,448 (Continued) 43 SIDPPENSBURG AREA SCHOOL DISTRICT GENERAL FUND - SCHEDULE OF EXPENDITURES (Continued) Year Ended June 30, 2004 Expenditures (Continued) Support Services (Continued) Instructional staff Salaries Employee benefits Purchased services Professional and technical Property Other Supplies Property Other objects 459,682 118,871 6,256 27,122 8,987 168,282 74,666 1,296 Total instructional staff 865,162 Administration Salaries Employee benefits Purchased services Professional and technical Property Other Supplies Property Other objects 1,044,710 245,421 157,972 1,113 49,452 15,149 16,028 14,480 Total administration 1,544,325 Pupil health Salaries Employee benefits Purchased services Professional and technical Property Other Supplies Property 183,971 48,534 16,408 166 100 6,688 120 Total pupil health 255,987 (Continued) 44 SIDPPENSBURG AREA SCHOOL DISTRICT GENERAL FUND - SCHEDULE OF EXPENDITURES (Continued) Year Ended June 30, 2004 Expenditures (Continued) Support Services (Continued) Business Salaries Employee benefits Purchased services Professional and technical Property Other Supplies Other objects 181,674 60,437 2,560 149 25,928 1,832 540 Total business 273,120 Operation and maintenance of plant services Salaries Employee benefits Purchased services Property Other Supplies Property Other objects 596,999 183,375 621,860 118,215 207,584 19,763 180 Total operation and maintenance of plant services 1,747,976 Student transportation services Purchased services Professional and technical Other Supplies Other objects 3,800 1,571,351 2,073 20 Total student transportation services 1,577,244 (Continued) 45 SHIPPENSBURG AREA SCHOOL DISTRICT GENERAL FUND - SCHEDULE OF EXPENDITURES (Continued) Year Ended June 30, 2004 Expenditures (Continued) Support Services (Continued) Central service Purchased services Professional and technical Property Otber Supplies Property Otber objects 24,308 28,964 454 11,087 6,239 250 Total central service 71 ,302 Otber support services 24,528 Total support services 7,193,092 Operation of Non-Instructional Services Student activities Salaries Employee benefits Purchased services Property Otber Supplies 243,630 32,992 12,000 7,795 2,836 Total student activities 299,253 (Continued) 46 SHIPPENSBURG AREA SCHOOL DISTRICT GENERAL FUND - SCHEDULE OF EXPENDITURES (Continued) Year Ended June 30, 2004 Expenditures (Continued) Operation of Non-Instructional Services (Continued) Community services Salaries Employee benefits Supplies Other objects 6,589 802 5,237 4,700 17,328 316,581 57,718 1,737,618 105,611 1,900,947 $ 25,681,173 Total community services Total operation of non-instructional services Other Refund of prior years' receipts Debt service Operating transfers out Total other Total expenditures 47 SIDPPENSBURG AREA SCHOOL DISTRICT COMBINING BALANCE SHEET - NON-MAJOR GOVERNMENTAL FUNDS Jnne 30, 2004 Special Revenue Totals Middle School Senior High Capital (MemorandUlll Athletic Athletic Reserve Payroll Only) ASSETS Cash $ 2,801 $ 9,021 $ 68,479 $ 218,636 $ 298,937 LIABILITIES AND FUND BALANCES Accounts payable $ $ 6,147 $ $ $ 6,147 Due to other funds 18,053 18,os3 Payroll withholdiogs 200,583 200,583 Totalliabllities 6,147 218,636 224,783 Fund Balances Reserved for Capital reserve 68,479 68,479 Athletic 2,801 2,874 5,675 Total Cund balances 2,801 2,874 68,479 74,154 Total JiabiUties and fund balances $ 2,801 $ 9,021 $ 68,479 $ 218,636 $ 298,937 48 SffiPPENSBURG AREA SCHOOL DISTRICT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NON-MAJOR GOVERNMENTAL FUNDS Year Ended June 30, 2004 Special Revenue Totals Middle School Senior High Capital (Memorandum Athletic Athletic Reserve Only) Revenues Local sources $ 9,592 $ 37,469 $ 191 $ 47,252 Expenditures Support services 8,021 8,021 Operation of non-instructional services 33,850 116,403 150,253 Total expenditnres 33,850 116,403 8,021 158,274 Deficiency of revenues over expenditures (24,258) (78,934) (7,830) (111,022) Other Financing Sources OPerating transfers in 27,268 78,343 105,611 Net cbanges in Cund balances 3,010 (591) (7,830) (5,411) Fund Balances (Deficit) - July 1,2003 (209) 3,465 76,309 79,565 Fund Balances - June 30, 2004 $ 2,801 $ 2,874 $ 68,479 $ 74,154 49 SHlPPENSBURG AREA SCHOOL DISTRICT COMBINING STATEMENT OF FIDUCIARY NET ASSETS- ACTIVITY FUNDS June 30, 2004 James Burd Nancy Grayson Elementary Elementary Middle School Activity Fund Activity Fund Activity Fund ASSETS Cash $ 8,554 $ 599 $ 11,764 Accounts receivable 8 Total assets $ 8,554 $ 607 $ 11,764 LIABILITIES Due to General Fund Due to student groups Total liabilities $ $ $ 123 11,641 11,764 $ 8,554 8,554 $ 607 607 $ 50 Totals Senior High (Memorandum Activity Fund Only) $ 66,422 $ 87,339 8 $ 66,422 $ 87,347 $ $ 123 87,224 87,347 $ 66,422 66,422 $ 51 (B8R) BoYER & RITTER CERTIAED Pusuc ACCOUNTANTS AND CONSULTANTS Web Site: www.cpabr.com INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Board of School Directors Shippensburg Area School District Shippensburg, Pennsylvania We have audited the financial statements of Shippensburg Area School District as of and for the year ended June 30, 2004, and have issued our report thereon dated August 13, 2004. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reportin!! In planning and performing our audit, we considered Shippensburg Area School District's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over fmancial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the fmancial statements being audited'may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over fmancial reporting and its operation that we consider to be material weaknesses. Compliance and Other Matters As part of obtaining reasonable assurance about whether Shippensburg Area School District's fmancial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. CAMP HILL CARLISLE CHAMBERSBURG LEWlSTOWN STATE COLLEGE An Independently Owned Member of the RSM McGladrey Network This report is intended solely for the information and use of the Board of School Directors, management, Federal awarding agencies and pass-through entities, and is not intended to be and should not be used by anyone other than those specified parties. Chambersburg, Pennsylvania August 13, 2004 53 ~~Av (~J BoYER. & RITTER CERflFlEO PuBuc ACCOUNTANTS AND CONSULTANTS Web Site: www.cpabr.com INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Board of School Directors Shippensburg Area School District Shippensburg, Pennsylvania Comoliance We have audited the compliance of Shippensburg Area School District with the types of compliance requirements described in the U. S. Office of Management and Budget (OMB) Circular A-133, Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 2004. Shippensburg Area School District's major Federal programs are identified in the summary of auditor's results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of the District's management. Our responsibility is to express an opinion on the District's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the District's compliance with those requirements. In our opinion, Shippensburg Area School District complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 2004. CAMP HILL CARLISLE CHAMBERSBURG LEWlSTOWN STATE COLLEGE An lndependently Owned Member of the RSM McGladrey Network. Internal Control Over Compliance The management of Shippensburg Area School District is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered the District's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants caused by error or fraud that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. This report is intended solely for the information and use of the Board of School Directors, management, Federal awarding agencies and pass-through entities, and is not intended to be and should, . not be used by anyone other than those specified parties. IV ~2~u Chambersburg, Pennsylvania August 13, 2004 55 SHIPPENSBURG AREA SCHOOL DISTRICT Schedule of Findings and Questioned Costs Year Ended June 30, 2004 Section I-Summary ofIndependent Auditor's Results Financial Statements Type of auditor's report issued: Unqualified Internal control over financial reporting: . Material weaknesses identified? . Reportable conditions identified that are not considered to be material weaknesses? Yes X No _ Yes...K- None Reported Noncompliance material to fmancial statements noted? Yes X No Federal Awards Internal control over major programs: . Material weaknesses identified? . Reportable conditions identified that are not considered to be material weaknesses? Yes X No Yes ...K- None Reported Type of auditor's report issued on compliance for major programs: Unqualified . Any audit findings disclosed that are required to be reported in accordance with Section .510(a) of Circular A-133? Yes X No Identification of major programs: CFDA Numbers 84.010 84.027 Name ofFedera1 Program or Cluster Title I - Grants to Local Educational Agencies Special Education - Grants to States Dollar threshold used to distinguish between type A and type B programs $300,000 Auditee qualified as low-risk auditee? Yes X No 56 SHIPPENSBURG AREA SCHOOL DISTRICT Schedule of Findings and Questioned Costs Year Ended June 30, 2004 Section II - Financial Statement Findings A. Reportable Conditions in Internal Control There were no findings relating to the fmanciaI statement audit required to be reported. B. Compliance Findings There were no findings relating to the financial statement audit required to be reported. Section ill - Findings and Questioned Costs for Federal Awards A. Reportable Conditions in Internal Control There were no findings relating to the Federal awards required to be reported in accordance with Section .SJO(a) ofOMB Circular A-l33. B. Compliance Findings There were no findings relating to the Federal awards required to be reported in accordance with Section .5JO(a) ofOMB Circular A-B3. 57 SIDPPENSBURG AREA SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2004 Pass- Federal Through Source C.P.D.A. Grantor's Grant Code Nwnber Number Period U. S. Department of Education Passed through the Pennsylvania Department of Education Title I - Grants to Local Educational Agencies I 84.010 013-040387 03-04 Title I - Grants to Local Educational Agencies I 84.010 013-030387 02-03 Title V - Innovative Education I 84.298 011-040387 03-04 Title V - Innovative Education I 84.298 011-030387 02-03 Title n - Improving Teacher Quality I 84.367 020-040387 03-04 Title II - Improviog Teacher Quality I 84.367 020-030387 02-03 Title II - Improving Teacher Quality I 84.281 020-020387 01-02 Title II - Education Technology I 84.318 055-040387 03-04 Title n - Education Technology I 84.318 055-030387 02-03 Medical Assistance - Access I 93.778 044-007387 03-04 Safe and Drug-free Schools and Communities I 84.186 100-040388 03-04 Safe and Drug-free Schools and Communities I 84.186 100-030388 02-03 Passed through the Capital Area Intennediate Unit Consortium Special Education - Grants to States I 84.027 N/A 03-04 Special Education - Grants to States I 84.027 N/A 02-03 Total U. S. Department of Education U.s. Department of Emergency Management Public Aasistance Grants Snow Removal D 83.544 N/A 02-03 Passed through Greencastle-Antrim School District Emergency Response & Crisis Management I 84.184E N/A 03-04 Total U.S. Department of Emergency Management (Continued) 58 Program or Annual Award Total Received (Refunded) in Fiscal Year Accrued (Deferred) Revenue at 7/1/2003 Revenue Recognized Expenditures Accrued (Deferred) Revenue at 6/30/2004 $ 520,942 $ 382,711 $ $ 484,579 $ 484,579 $ 101,868 $ 423,706 112,988 93,679 19,309 19,309 $ 12,626 8,417 8,623 8,623 206 $ 12,110 1,615 1,615 $ 165,215 110,143 139,620 139,620 29,477 $ 153,983 51,328 31,118 20,210 20,210 $ 17,188 2,760 2,760 $ 12,308 5,744 12,308 12,308 6,564 $ 11,036 2,144 833 2,026 2,026 715 $ 18,611 18,458 17,614 18,611 18,611 17,767 $ 16,712 .7,428 8,632 8,632 1,204 $ 15,739 9,443 4,748 4,695 4,695 896,103 (10,752) 141,615 277,473 10,752 277,473 10,752 1,006,838 94,549 $ $ 277,473 227,064 182,924 1,006,838 252,350 N/A 1,873 1,873 $ 13,125 13,125 13,125 13,125 14,998 1,873 13,125 13,125 59 SHIPPENSBURG AREA SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) Year Ended June 30, 2004 Pass- Federal Through Source C,F.D.A. Grantor's Grant Code Number Number Period U. S. Department of Agriculture Passed through the Pennsylvania Department of Education: National School Lunch Program I(F) 10.555 N/A 03-04 National School Lunch Program 1(F) 10.555 N/A 02-03 NmonalSroomLunroProgram I(S) N/A N/A 03-04 National School Lunch Program I(S) N/A N/A 02-03 Special Milk Program for Children I(F) 10.556 N/A 03-04 Special Milk Program for Children I(F) 10.556 N/A 02-03 Passed through the Pennsylvania Department of Agriculture: Food Donation (a) I(F) 10.550 N/A 03-04 Total U. S. Department of Agriculture Total Expenditures of Federal Awards Source Codes: Legends: D - Direct Funding I - Indirect Funding (F) - Federal Share (S) - State Share (a) Donated commodities valued at local marlcet values (b) Total amount of commodities received from Department of Agriculture (c) Inventories at July I, 2003 (d) Total amount of commodities used (e) Inventories at June 30, 2004 See Notes to Schedule of Expenditures of Federal Awards, 60 Progrwn or Annual Award Total Received (Refunded) Fiscal Year Accrued (Deferred) Revenue at 7/1/2003 Revenue Recognized Expenditures Accrued (Deferred) Revenue at 6130/2004 N/A 220,377 228,189 228,189 7,812 N/A 6,624 6,624 N/A 28,100 29,101 29,101 1,001 N/A 887 887 N/A 4,367 4,513 4,513 146 N/A 140 140 N/A (b) 35,156 (c) (6,616) 35,088 (d) 35,088 (e) (6,684) 295,651 1,035 296,891 296,891 2,275 $ 1,206,752 $ 144,523 $ 1,316,854 $ 1,316,854 $ 254,625 Test of 50% Rule: Total Expenditures $ 1,316,854 Less State Expenditures 29,101 Total Federal Expenditures $ 1,287,753 Programs selected for testing as major programs: Title I - Grants to Local Educational Agencies $ 503,888 Special Education - Grants to States 288,225 $ 792,113 1 1,287,753 = 61.51% 61 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL A WARDS Note 1. Significant Acconnting Policies The accompanying Schedule of Expenditures of Federal Awards is a summary of the activity of the District's Federal award programs and presents transactions that would be included in the financial statements of the District presented on the accrual basis of accounting, as contemplated by accounting principles generally accepted in the United States of America. Note 2. Title I. Grants to Local Educational Agencies The Title I - Grants to Local Educational Agencies has been audited in accordance with OMB Circular A- 133. Note 3. Special Education - Grants to States - Individuals With Disabilities Education Act (IDEA) IDEA has been audited in accordance with OMB Circular A-133. 62 SHIPPENSBURG AREA SCHOOL DISTRICT SUMMARY SCHEDULE OF PRIOR YEAR'S AUDIT FINDINGS Year Ended June 30, 2004 There were no audit fmdings for the year ended June 30, 2003. 63 (') ~-; ....., c:;) c:.,-:..") t:J''1 <- ::c"', -'::' C3 -0 :rJ"i'I n1~ :'\;!t'3 '''';L <:)0 ~':Ij ~f, ..-,1 !'-?C") ~~~ en ?"0 .., t') -.J """i::; :;i':;' r ., (...> - . . t Municipal Secondary Market Disclosure Information Cover Sheet This cover sheet should be sent with all submissions made to the Municipal Securities Rulemaking Board, Nationally Recognized Municipal Securities Information Repositories, and any applicable State Information Depository, whether the filing is voluntary or made pursuant to Securities and Exchange Commission rule 15c2-12 or any analogous state statute. See www.sec.govlinfolmunidpallnrmslr.htm for list of current NRMSIRs and SIDs IF THIS FILING RELATES TO A SINGLE BOND ISSUE: Provide name of bond issue exactly as it appears on the cover of the Official Statement (please include name of slate where issuer is located): Provide nine-digit CUSlp. numbers if available, to which the information relates: IF THIS FILING RELATES TO ALL SECURITIES ISSUED BY THE ISSUER OR ALL SECURITIES OF A SPECIFIC CREDIT OR ISSUED UNDER A SINGLE INDENTURE: Issuer's Name (please include narne of state where Issuer is located): . Shippensburg Area School District Other Obligated Person's Name (if any): N / A (Exactly as it appears on lite Official Statement Cover) Provide six-digit CUSlp. number(s), if available, oflssuer: see attached .(Contact CUSIP's Municipal Disclosure Assistance Line at 212.438.6518 for assistance: with 0 btaining the proper CUSIP numbers.) TYPE OF FILING: o Electronic (number of pages attached) Ii1I Paper (number of pages attached) 67 If information is also available on the Internet, give URL: yO WHAT TYPE OF INFORMA nON ARE YOU PROVIDING? (Check all that apply) A. 0 Annual Finandallnformation and Operating Data pursuant to Rule lSc2-12 (Financial information and operating data should not be filed with the MSRB.) Fiscal Period Covered: B. IXI Andited Financial Statements or CAFR pursuant to Rule lSc2-12 Fiscal Period Covered: July 1. 2003 - June 30, 2004 C. 0 Notice of a Material Event pursuantto Ruie lSc2-12 (Cheek as appropriate) I. 0 Principal and interesl payment delinquencies 2. 0 Non-payment related defaults 3. 0 Unscheduled draws on debt service reserves reflecting financial difficulties 4. 0 Unscheduled draws on credit enhancements reflecting financial difficulties 5. 0 Substitution of credit or liquidity providers, or their failure to perform 6. 0 Adverse tax opinions or events affecting the tax- exempt status of the security 7. 0 Modifications to the rights of security holders 8. 0 Bond calls 9. 0 Defeasances 10. 0 Release, substitution, or sale of property securing repayment of the securities II. 0 Rating changes D. o Notice of Failure to Provide Annual Finaneiallnformation as Required E. 0 Other Secondary Market Information (Specify): I hereby represent that I am authorized by the issuer or obligor or its agent to dlstrihute this information puhllcly: Issuer Contact: Name Deborah Westover Title Business Administrator/Board Secretary Employer Shippensburg Area School District Telephone (717) 530-2702 Fax (717) 530-2724 EmailAddressdeborah.westover@shio.k12.oa.usIssuerWeb Site Address www.shio.kI2.oa.us Dissemination Agent Contact, if any: Name N / A Title Address 317 N. Morris St. Employer Address Telephone Email Address Obligor Contact, if any: Name N/A City Shipoensbur~tate ~ Zip Code 17257 Employer Address City State _ Zip Code Fax Relationship to Issuer Title Telephone Email Address Investor Relations Contact, if any: Name N/A Telephone City State _ Zip Code Fax Obligor Web site Address Title Email Address <HELP> for explanation, <MENU> for similar functiDns. ubig3 * <MUNI> <GO> TO SELECT, <PAGE>,<MENU> ISSUE: SHIPPENSBURG PENN AREA S UNREFUNDED BALANCE DATED: 12/ 1/97 MATURITY PAR(SODO) COUPON P/V @ISSUE CUSIP/ID NEXT-CALL @PRICE PAR-CAL II 11/15/04 130 4 '2 100 824760DKCSJ Matured Huni SER Austr13 ia 6 ~ 51 00 Br't:azi 11.. Yrope 44 2lJ WerIldlY 4 ~0Ilg I(ong 8522977 GOOD Japon al 23201 S9l1O Slngqpors 65 621Z 1000 U.S. 1 Z12 218 2000 Copyright 21lO5 B10000berg L.P. G7~2: 14-Jan-QS :11149'23 7.001'd1 ----------- ~-------_._---- ---- . TII.TmJ.)BT 'II.JT~ "IT,..... <HELP> for explanation, <MENU> for similar functions. 4bigl * <MUNI> <GO> TO SELECT, <PAGE>,<MENU> I1uni SER ISSUE: SHIPPENSBURG PENN AREA S MATURITY PRR(SOOO) COUPON PlY @ISSUE D 11/15/01 515 2.6 100 V 11/15/02 730 2.8 100 ~ 11/15/03 750 3.1 100 ~ 11/15/04 775 3.3 99.846 ~ 11/15/05 800 3 12 99.803 @ 11/15/06 830 3.65 99.761 DATED: 9/ 1/01 CUSIP/ID NEXT-CAll @PRICE PAR-CAl 824760CR(1) Matured 824760CS(9) Matured 824760C1(7) Matured 824760(UC4) Matured 824750CV(2) NON-CALL NON-CAL 824760CWCO) NON-CALL NON-CAL Austn:t1 ia 61 r-crz 1 11 30 Eur-ope 44 2 1ier'1IIcJOy 69 9 1 Hong 1<0"9 8S2 2977 6000 J"P"" 81 3 3201 _0 Sing",,""" 65 6212 1000 U.S. 1 212318 _0 Oopo,jright 2005 Bl<>OOlOl>erq LP. G13C-"4o-2 14-JQfl-DS U.4915f . ...,...,.....- . ,~- ... ~nn~ ___________________________________________________________. <HELP> for explanation, <MENU> for similar functions. ubigl * <HUNI> <GO> TO SELECT, <PAGE>,<MENU> I1uni SER ISSUE: SHIPPENSBURG PENN AREA S SER A MATURITY PARCSOOO) COUPON P/V @ISSUE n 11/15/02 5 2.4 100 V 11/15/03 25 2.6 99.9 ]) 11/15/04 380 2.8 99.709 ~ II/IS/OS 525 3.1 99.622 ~ 11/15/06 545 3.3 99.538 ~ 11/15/07 1425 3 12 99.459 n 11/15/08 1475 3.7 99.385 ID 11/15/09 1535 3.8 99.313 ~ 11/15/10 1590 4 99.622 lID 11/15/11 1650 4.05 99.183 III 11/15/12 640 4.2 99.125 DATEO: 10/15/01 PAr,HAl CUSIP/ID NEXT-CALL @PRICE 8Z4760C)((8l Matured 824760CY(6) Matured 824750CZ(3) Matured 824760DA(7l NON-CALL 824760DB(51 NON-CALL 824760DC(3) 11/15/05 100 824760DD(1) 11/15/06 100 824760DE(9) 11/15/06 100 8Z4760DF(6) 11/15/06 100 824760DG(4) 11/15/05 100 824760DH(Zl 11/15/06 100 NON-CAL NON-CAL N/A N/A N/A N/A N/A N/A Awstl:""G ia 61 Z rei 11 3 urope 20 7 lO:et"'/IIral'\Y 49 .0 H<>~ Kong B52 2Y7 6000 J."", 81 3 3201 B900 Si"'l"~ 65 6212 1000 U.S. 1 212318 2000 Copyrighl 2005 Bl"".ber9 L.F. G73Q-940--2 14-Jqn-{)5 1l14J.42 .'hTllTI:'\TJt .UT.]' "ai"l..r ~on~ ______________~_____________________________________________~ nTOo ""h_ .__ <HELP> for explanation, <MENU> for similar functions. ubig3 Huni S~~ t <HUNl> <GO> TO SELECT <PAGE>,<MENU> ISSUE: SHIPPENSBURG PENN AREA S MATURITV PARCSOOO) COUPON P/V @ISSUE D 11/15/11 30 3 IS 99.21 ~ 11/15/12 915 3.3 99.294 ~ 11/15/13 1590 3 'z 99.225 ~ 11/15/14 1650 4 101.447 ~ 11/15/15 1715 4 100.574 ~ 11/15/16 1795 4 100 n 11/15/17 1870 4 99.19 ID 11/15/18 1950 4 '2 101.192 ~ 11/15/19 2035 4'2 100.734 10) 11/15/20 1870 4 "s 101. 101 DATED: 10/ 1/04 CUSIP/ID NEXT-CALL @PRICE 824760DR(0) 5/15/11 100 824760DS(8) 5/15/11 100 824760DT(6) 5/15/11 100 8247600U(3) 5/15/11 100 824760DV(1) 5/15/11 100 824760DW(9l 5/15/11 100 824760DX(7) 5/15/11 100 824760DY(5) 5/15/11 100 824760DZCZJ 5/15/11 100 824760EA(6) 5/15/11 100 PAR-CAl N/A NlA N/A N/A NIA N/A N/A NlA NlA N/A AYstra :i.Q Ii a 9 600 Bp"azi 11 30 4 00 ELIt"OpE' 4 20 7'330 1harJ'-' 49 0 rlang Ko"'9 s52 'l971 6000 Japotl 81 3 3201 s~ Singapor"E!' 65 S212 1000 U,S. 1 212. 318 2000 Copyri,*,t 2005 Blooftlbfrg L-.P. , G73H40-2 a-Jon-OS 11'4"02 ...~~ .,.. -.----.----- --------_._-~---- - -----" r~ <' g '" ~ <:> q ..c: "" ~ r ? 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