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Home My WebLink About94-06551 j V'J c & J c;d R J . .~ r- J - \() \.() ~ Jl4 9Y. (. '$)/ ~ -r.u-. ..-.------- . , . . <_ .....'-- ,'-'f''''' ',cn"r'~ '-,';""'~:'i'" '.-',' "".",,_,': ~"""" ~"'.-..,_, __",_,,..,.,,~, ,_....". __,n._.___....____""~ ' (J~(J. (jrc(//owolt ~ eOJ/lpOl/lI. p.Co (;~"/0;.(1 .eft,;,/" .C~rl'V4'''/'/1'f1.J o ,,<IV oj 0, " ". '1/Jo r.... IV -1J" )(.0 cJV I'" ~. EAST PENNSBORO AREA SClIOOL DISTRICT ENOLA, PENNSYLVANIA JUNE 30, 1994 - 0- 0< -.I . ", " , I-' w ,,"- .=-: . .,j '" , . v .- :1"' -<-< - '..", .J:;.. GREENAWALT & COMPANY, p.e, C,IIIJW"I,U ROOIIMS.JIt. IMotU e. LYONS ItOW"RD l.OlBHNAWALT C,,!ooN It UOffMAN MlOIAItLI. IATKR JOliN II. UINOLRIl,JR. lutnna^" J, ICBLLY III. A. onaNAWM T(l9"""1) A. A.Il!IOINOIll(lUIREU) CERTIIf1EO PUBLIC ACCOUNTANTS P,Q. Bo, 6 400 WEST MAIN STREET MECHANICSOURG. PENNSYLVANIA 17055 17171766.4763 FAX 17171 7ea.2131 UIMNCIl mflCB: U wlln ffiM'UT STIlnllT CAUISLB. fA 1701] (111)2U....121 ,^X(111)HMUl llillEPENDENT AUDITORS' REPORT Board of School Directors East Pennsboro Area School District Enola, Pennsylvania We have audited the accompanying general purpose financial statements of East Pennsboro Area School Dlstrtct as of June 30, 1994 and for the year then ended, as llsted in the preceding Index. These general purpose financial statements are the responsibility of the District's management. Our responslbillty Is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit Includes examining, on a test basis, evidence supporting the amounts and disclosures In the general purpose financial statements. An audit also Includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. We belleve that our audit provides a reasonable basis for our opinion. In our opinion, the accompanying goneral purpose financial statements present fairly, in all material respects, the financial position of East Pennsboro Area School District as of June 30, 1994, the results of its operations and the cash flows of its Food Service Fund for the year then ended, in conformity with generally accepted accounting principles. As discussed In Note 8 to the financial statements, the District changed Its method of accounting for compensated absences, ~aMJ/f~,P,c. GREENAliA~T)'& COMPAAY,~.c. September 22, 1994 Mechanlcsbuq; , Pennsylvania . 1 . MF.MIIER~ - ,\MURU:,\N INSTlnlTF. nFCERnf-'EO rURtle ACCOl1NTANTS _ PENNSYLVANIA INSTtnlTE oFCERTlnED rURLlC ACCOUNTANTS EAST PENNSBORO ARE,\ SCIIOOL DISTRICT CmlBINEO BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30, 1991. Governmental Fund Special General Revenlle Assets Cash and equivalents Investments. at cost Due from other funds Accounts recoivable Delinquen~ taxes receivable (net of allowance for uncollectibles, $ 551,100) Inventory Land Buildings Equipment and furnishings Food service equipment (net of accumulated depreciation of $ 165,615) Amount to be provided for the ~etirement of general long- term debt $ 353,1.75 915,205 67,884 (.37,162 $ 6,729 $ 430,675 264,829 o Total $ 2.038.555 $ 6.729 $ 430,675 Liabilities Accrued payroll and benefits Accounts payable Deferred revenue Due to other funds Due to student organizations General obligation bonds payable Accumulated compensated absences $ 1,176,425 171,817 244,654 $ $ 176,315 . 23,000 Total liabilities 1. 592 . 896 -0. 199.315 . Fund equi ty Invested in general fixed assets Fund balances/retained earnings Reserved Unreserved 231,360 445.659 6.729 6.729 6.729 f) 41.5.659 Total fund equity 231. 360 Total $ 2,038.555 $ $ 4'30.675 o The accompanying notes are an integral part of these financial statements. - 2 (;) Proprietary Fund Tvoes FldllC tnry Fund Tyo{\n Accol1nt Grouns Food Trust nnd Genernl General Service Av.oncv Actlvttlen Flxod Anaora l.on~.Term Debt $ 105,764 $ 49,317 $ 33,162 $ $ 22,71.2 1,119 . 14,121 325,856 20,243,71.5 1,859,109 16,612 15.218.599 $ 159.239 $ 50.436 $ 33.162 $ 22 ,428.710 $ 15.218.599 $ $ $ $ $ 94,022 5,552 8,495 44,884 33 , 162 14,863,354 355.245 102.517 50.436 33.162 .0- 15.218.599 22,428,710 16,612 40.110 56,722 -0- -0- 22,428,710 -0. $ 159.239 $ 50 ,1.36 $ 33,162 $ 22,428.710 $ 15,218,599 EAST PENNSBORO AREA SCIIOOL DISTRICT COMBINED STATEMENT OF REVENUE. EXPENDITURES AND CIIANGES IN FUND BAl.ANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1994 Spectal CapItal General Rp.venUB Pr01ect Revenue Local sourco:) $ 10,959,238 $ 25,978 $ 55,123 State sources 4,577,559 Federal sources 214,175 Other flnanctng sources 52.920 50.000 Total re ve nue 15,803.892 75.978 55.123 ExpendItures InstructIon 9,676,251, Support servIces 4,297,818 OperatIon of nonlnstructlonal sel'vlces 207,590 71,071 FacIlItIes acquIsItIon, constructIon and lmprovements 83,934 3.212,826 Other fInancIng uses 1.412.688 Total expendItures 15,678.284 71.071 3.212.826 Excess of revenue over (under) expendItures 125,608 4,907 (3,157.703) Fund balances, July 1, 1993 320.051 1,822 3.389.063 Fund balances, June 30, 1991, $ 445.659 $ 6,729 $ 231.360 The accompanyIng notes are an Integral part of these fInancIal statements. - 3 . EAST PENNSBORO AREA SCIIOOL DISTRICT ST/\TENENT OF REVENUE, EXPENDITURES AND CIIANGES IN FUND BAlANCES . BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDEO JUNE 30. 1994 Revenue Local sources State sources Federal sources Other financing sources Total revenue Expend i tures Instruction Regular programs Speciel programs Vocational education programs Other instructional programs Adult education programs Community College education programs Total instruction Support services Pupil personnel Instructional staff Adminis tra tion Pupil health Business Operation and maintenance of plant services Student transportation services Central Other support services Total support services General Fund Variance Favorable BlIdp..et Actual !Unfavorable) $ 10,992,522 $ 10,959,238 $ (33,284) 4,613,218 4,577,559 (35,659) 250,123 214,175 (35,948) 20.000 52.920 32.920 15.875.863 15.803.892 (71.971) 7,867,375 7,823,377 43,998 1,392,880 1,303,029 89,851 220,695 220,695 -0. 60,946 53,981 6,965 9,398 7,602 1,796 286 .41,7 267.570 18.877 9.B37.7/.1 9,676.254 161.487 430,629 422,817 7,812 423,907 412,265 11,642 1,262,641 1,209,845 52,796 190,699 187,528 3,171 145,105 144,513 592 1,403,687 1,395,034 8,653 469,575 467,501 2,074 30,200 29,908 292 28.726 28.407 319 4,3B5.169 4.297.818 87.351 (Continued) . 4 - Scednl RAvenlle Fund V,wlance Favorablo Bud2et ActuAl IUnfnvornb le) $ 22,500 $ 25,978 $ 3,1.78 50,000 50.000 -o- 12, 500 75 978 3 ,/,78 .0. -0- -0- .0- -0. -0- . EAST PENNSBORO AREA SCHOOL DISTRICT STATENENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BAUNCES . BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS (Cont'd.) YEAR ENDED JUNE 30, 1994 (:I General Fund B~\dv.e t A~tual Variance 0 Favorable !Unfavorable) Expendltures (Cont'd,) Operation of noninstructiona1 servlces Student actlvlties Community services o $ 213,740 2" . 185 $ 193,189 14 ,40 1 $ 20,551 9.784 Total operatlon of non- instructlonal servlcos 237.925 207,590 30.335 <<> FacUities acquisltion, construction and improvement services 142,000 8 3 . 9 34 58.066 Other financing uses Debt setvlce Fund transfers 1,357,/.60 55.400 1,357,379 55.309 1.412.688 81 91 . Total other Hnanclng uses 1.412.860 172 Budgetary reserve 100,000 .0- 100.000 Total expendltures and other Hnanc ing uses 16.115,695 15.678.284 437.411 . Excess (deficiency) of revenue over expenditures and other financlng uses (239,832) 125,608 365,440 Fund balance, July 1, 1993 280.362 320.051 39.689 CD Fund balance, June 30, 1994 $ 40.530 $ 445.659 $ 405,129 ~ The accompanying notes are an lntegral part of these financlal statements. o - 5 - o . Soecfnl Revenuo Fund Bud.e t Aceun1 Val'lance Favorable (UnEnvornh1el o $ 72 , 500 $ 71,071 $ l,I129 72.500 71.071 1.429 o -0. -0- -0- -0. -0- .0. .0. .0- -0- 72 . 500 71 ,071 1.1.29 .0. 4,907 4,907 .0- 1.822 1.822 $ -0- $ 6.729 $ 6.729 EAST I'ENNSBORO AREA SCHOOL DISTRICT STATEMENT OF REVENUE, EXPENSES AND CItANGES IN RETAINED EARNINGS ALL PROPRIETARY FUND TYPES YEAR ENDED JUNE 30, 1994 Net income (loss) Food ServIce $ 330,572 330.572 457,430 44,619 2,356 4.093 508.498 1177.926) 2,828 5,309 12,359 108,130 44.619 173.245 (4,681) 61. 403 $ 56.722 OperacIng revenue Local sources - food servIce revenuo Total operating revenue Operating expenses Payments to food servIce contractor Donated commodIties consumod Supplies Depreciation Total operatIng expenses OperatIng income (loss) Nonoperating revenue (expenses) EarnIngs on Investments Noncash contrIbutIons from General Fund State sources Federal sources Federal sources - donated commodItIes Total nonoperating revenue (expenses) Retained earnings, July 1, 1993 Retained earnIngs, June 30, 1994 The accompanying notes are an integral part of these financial statements. - 6 - III EAST PENNSBORO AREA SCHOOL DISTRICT STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES YEAR ENOED JUNE 30, 1994 Food So rvIco Cash flows from operatIng actIvIties OperatIng Income (loss) Adjustments to reconcile operating Income (loss) to net cash provided by operating activIties DeprecIatIon Noncash contributIons from General Fund Donated commodIties consumed Decrease (Increase) In Inventory Accounts receivable Increase (decrease) in Accounts payable $ (177 ,926) 4,093 5,309 44,619 (278) (18,387) (33.484) Net cash used in operating activities 1176.054) Cash flows from noncapital fInancing activities SubsIdIes receIved State Federal Net cash provIded by noncapital fInancIng actIvItIes 12,359 108.130 120.489 2,828 (2.676) 152 (55,413) 161.177 $ 105,764 Cash flows from Investing actIvItIes EarnIngs on Investments Payment for purchases of equIpment Net cash provided by InvestIng actIvities Net increase (decrease) in cash Cash and equivalents, July 1, 1993 Gash and equivalents, June 30, 1994 The accompanying notes are an integral part of these financial statements. - 7 - EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 199/, 1. Reporting entity E,1st Pennsboro Area School DistrIct Is tho level of government which has oversight responsIbILIty and control over actIvIties related to publIc school educatIon. The report Includes sel"vlces provIded by the District to resIdents within its boundarIes: the Cumberland County cOllll1lunttles of East Pennsboro Township and West Falrvlew Borough. ServIces provided include a comprehensive curriculum for prImary and secondary education as well as special education and vocational educatIon programs. The DIstrIct receives revenuo from local, state and federal sources and must comply with the requirements of these funding sourcea. Criteria establIshed in Governmentsl Accounting Standards Board Statement Number 14 ware used in determining the entities to be included in the reporting entity, These criterta include basIc items such as financial interdependency, selection of governing authorlLy, designatIon of management, ebility to significantly influence operations, accountabilIty for fiscal matters, scope of public service and special fInancIng relatIonships. All operations of ~he District are included in the reporting e"tity, There are no other component units that meet these criteria for inclusion in the reporting entity. 2. Summary of significant accounting polIcies The accounts of East Pennsboro Area School District are maintained on the basis of accounting practices prescribed or permitted by the Manual of Accounting and Related Financial Procedures for Pennsylvania School Systems, issued by the Pennsylvania Department of Education in accordance with the provisions of the School Laws of Pennsylvania, These practices, as applied by the District, are in conformity wIth generally accepted accounting principles. A summary of the more significant accounting policies is as follows: Fund accounting The accounts of the District are organized on the basis of fund types and account groups. Each fund type may consist of several different funds. Each fund is a separate entity accounted for by a separate set of self-balancing accounts which comprise its assets, liabilities, fund balance/retained earnings, revenues and expenditures/expenses as appropriate. The fund types and the account groups utilized by East Pennsboro Area School District ale as follows: - a - EAST PENNS80RO AREA SCHOOL DISTRICT NOTES 1'0 FINANCIAL STATEMENTS \Cont'd.) JUNE 30, 1994 2. Summary of significant accounting policies (Cont'd,) Fund accounting (Cont'd,) Flduclarv Fund Tvoes (Cont'd.) . Trust and Agency Account - Accounts for proceeds from actlvlt~es open to the entire student body and faculty, Agency funds also Include a central payroll fund. The payroll fund accounts fer salarles earned by District employees. It handles the disbursing of such amounts to the employees and to taxing and other agencies on their behalf. Activity Fund . Accounts for programs operated and sponsored by various clubs and organizations within the schools, Activity funds are Agency Funds which are separately accounted for because of legal requirements. Account Groltos The account groups are used to account for the general fixed assets and general long-term debts of the District. These account groups are not funds. They are only conceL'ned with the measurement of financial position and are not Involved with the measurement of results of operations. General Fixed Assets - General Fixed Assets account for the District's Investment in fixed assets exclusive of those included In the Food Service Fund. No depreciation has been provided on general fixed assets, Interest costs incurred to purchase or finance fixed assets is not capitalized as part of fixed assets. Fixed assets utilized In the Food Service operations are capitalized in the Food Service Fund. Depreciation of all exhaustible fixed assets used by the Food Service Fund is charged as an expense against Its operations. Depreciation has been provided over the estimated useful lives using the straight-line method. The estimated useful life of food service equipment is 12 years. Fixed assets are valued at historical cost or at estimated historical cost if actual historical cost is not available. General Long-Term Debt. Long- term liabilities expected to be financed from governmental funds are accounted for in the General Long-Term Debt Account Group. All long- term debt Is offset by deferred charges to future taxation. Interest on long-term debt Is recorded on the date such interest Is due to be paid, . 10 EAST PENNSBORO AREA SCHOOL DISTRICT NOTES 1'0 FINANCIAL STATEftENTS (Cont'd.) JUNE 30, 199'. 2. Summary of signiftcant accounting policies (Cont'd.) Basis of accounting Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Governmental Fund Tvpe9 All governmental funds utilize the modified accrual basis of accounting. Under this method, revenues are recorded when susceptible to accrual, i. e.. both measurable and available. Available means collectible within the current period or soon enough thereafter to pay current liabilities. Such revenue items, which are accrued in the year to which they apply arc principally property taxes, and inter-governmental reVenues. Expenditures are generally recognized under the moditied accrual basis of accounting when the related fund liability is incurred. Exceptiona to thia general rule include principal and interest on general long-term debt which is recognized when due. Disbursements for inventory type i terns and prepaid expenses are considered expenditures at the time of purchase. Fiduciarv Fund Types 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. Proprietarv Fund Types The Food Service Fund uses the Pennsylvania Department of Education prescribed "modified enterprise fund" method of accounting. Under this full accrual method of accounting: Equipment utilized by the Food Service Fund is recorded as fixed assets of that Fund (at cost), and is depreciated therein on a straight-line basis over an estimated useful life of 12 years. The fixed assets, net of accumulated depreciation are offset within the Fund by a reserved portion of retained earnings representing the net investment in Food Service equipment. Donated commodities received by the Food Service Fund are inventoried at estimated cost to purchase comparable products locally or at cost figures provided by the Federal Government if comparable products are not locally available. - 11 - EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 1994 2, Summary of aignificant accounting policies (Cont'd,) Basis of accounting (Cont'd,) Proorietarv Fund Tvoes (Cont'd.) Inventories are valued Remainder inventories at earnings. on a first-in, first-out basis. year-end are a component of retained The School 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.) ere not proportionate ly recognized wi thin 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). Account CrOtlDS Land, buildings and equipment are recorded at historical cost (or at estimated historical cost if actual cost is not available). Depreciation is not computed on these assets. Long-term debt is revenue sources. as District debt. offset by an amount to be provided by future taxation or other General obligation bonds payable in future yeers are recorded Interest on these bonds is recorded when such interest is due. Compensated absences are those for which employees receive pay. A liability is recorded through the use of estimates which apply historical data to current factors. The District maintains records of unused absences and applies current and/or contracted compensation rates to the vesting types of compensated absences. Vacation leave does not accumulate. The District allows only restricted sabbatical leave and therefore has no recorded liability in advance of the sabbatical. Cash and equivalents The District pools cash resources of certain funds in order to facilitate the management of cash. AY part of this cash management program sponsored by the District's depositary institution, overnight repurchase egreements are bought end sold on a regular basis to increase interest earnings. Cash and equivalents applicable to a particular fund is readily identifiable. The balances in the pooled cash management accounts are available to meet current operation requirements. - 12 - EAST PENNSBORO AREA SCHOOl. DISTRICT NOTES TO FINANCIAl. STATEMENTS (Cont'd.) JUNE 30, 1994 2. Summary of sIgnifIcant accountIng pollci.s (Cont'd.) Budgets The DIstrIct adopts, prIOl' to the begInnIng of each fiscal year, an annual budget for the General Fund and AthletIc Fund. The budgets are maIntained on a modIfIed accrual object, with expendItures controlled by llne item. end of each year and must be reapproprIated. basis by fund, function and Appropriations lapse at the The School Board approves budget transfers between departments within School DistrIct funds. Budgeted amounts are as orIgInally adopted or as amended by the School Board at varIous tImes throughout the fiscal year. Revenue l.oca 1 sources Real estate, residence and occupatIon taxes are levIed as of July 1 with a legal, enforceablB claim against thB taxpaYBr and/or propBrty. These taxes are recognizable as current revenue whBn received by the District during the fiscal year and also estImated to be recelv~d by the District wIthin sixty days after the close of the fiscal year. An allowance for estImated uncollectIble taxes Is recorded based upon a historical Bstimate of delInquent taxes that will not be recBlved within one year. Deferred revenues arB based upon a historIcal estimate of delinquent taxes expected to be received withIn one year of the flscal year end. The portIon of taxes receIvable which Is expected to be received within 60 days of June 30 is recorded as revenue In the current year .f;,~ rnmaining amount of taxes receivable whIch Is expected to be received lathln one yea. from June 30 is recorded as doferred revenue. All other amounts in the taxes rbceivable are written off as estimated uncollectIble taxes. Revenue . State sources State subsidIes due the DistrIct as current flscal year entitlBments are recognIzed as revenue in the current fIscal year. Revenue - Federal sources Federal program funds appllcable to expenditures for the same program in the current flscal year but expected to be receivBd in the next flscal year are accrued as current revenue. . 13 . EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd) JUNE 30, 1994 3. Cash and investments The District's cash and equivalents consist of cash balances deposited in financial institutions and repurchase agreements purchased by the District from the financial institutions as part of a cash management account. The types of authorized investments are limited by state reguldtions. The District's investments consist of deposits in the Pennsylvania Local Government Investment Trust. These investments are carried at cost which approximates market value. At June 30, 1994, all investments of the Trust were either obligations of the U. S. Government or its agendes or instrumentali ties, or deposits insured by FDIC. The cash and investments at June 30, 1994 are categorized as follows: Total Carrying Bank Value Balance $ 575 $ -0- 100,000 100,000 .0- .0- 447,872 450.783 $ 548 ,447 $ 550.783 Carrying Market Value Value $ -0- $ -0. -0- .0- -0- -0- -0- .0- 1. 345.880 1. 345.880 $ 1. 345,880 $ 1.345.880 Cash and eO\livalents Change funds Insured (FDIC) Collateral held in the District's name Collateral not held in the District's name Total Investments Insured (FDIC) Collateral held in the District's name Collateral not held in the District's name Pooled investments (PLIGIT) Investment polides followed during the year ended June 30, 1994 did not significantly alter the categorization of investments shown above. For purposes of the Food Service Fund statement of cash flows, the District considers all deposits purchased with an original maturity of three months or less to be cash or cash equivalents. . 1/. - EAST PENNSBORO AREA SCIIOOL DISTRICT NOTES 1'0 FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 1994 4. Accounts receivable Accounts receivable at June 30, 1994 consist of the following: General Fund Food Service Fund Federal subsidies State subsidies Due from other governmental units Due from EIT/OPT collector (September) $ 30,120 145, 50~ 18,534 243.000 $ 20,455 2,287 $ 437.162 $ 22.742 5. Delinquent taxes receivable As explained in Note 2, taxes are recorded as revenue only when received, or, in the case of delinquent real estate taKes, available within siKty days. The remaining balance of delinquent taKes receivable are recorded as deferred revenue in accordance with school accounting policies. Deferred tax revenue amounted to $ 219,342 at June 3D, 1994. Delinquent taKes receivable as reflected on the June 30, 1994 balance sheet consist of the following: Prior to 1989 1989-90 1990-91 1991-92 1992.93 1993-94 $ Real Total Estate Personal 47,718 $ -0- $ 47,718 35,B06 -0- 35,806 75,014 1,469 73,545 118,394 16,335 102,059 181,402 75,097 106,305 357.595 124.538 233.057 815,929 217,439 598,490 1551.100) 191. 998) 1459.102) 264.829 $ 125.441 $ 139.388 Less: Al10>'ance for uncollectibles Total $ 6. General FiKed Assets As explained in Note 2, buildings and equipment are reflected on the balance sheet under the General Fixed Assets Group of Accounts stated at historical cost or estimated historical cost if actual historical costs are not available, A summary of changes in fixed assets for the year ended June 30, 1994 is as follows: - 15 . EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEHENTS (Cont'd. ) JUNE 30, 1994 6. General Fixed Assets (Cont'd. ) Transfers Beginning llnd End of Yeer AddItIons DisDOYRls of Year General fixed essets Land lInd improvements $ 267,37B $ 58,1,78 $ -0- $ 325,856 Buildings llnd improvements 12,248,591 7,995,154 -0- 20,243,745 Furniture and equipment 1. 661. 949 207.660 (10.500) 1.859.109 $ 11,,177 ,918 $ 8.261. 292 $ (10.500) $ 22,"28.710 Transfers Beginning and End of Yenr Additions DisDosals of Year Food Service Fund fixed assets Furniture and equipment $ 179,552 $ 2,675 $ .0- $ 182,227 Accumulated depreciation (161.522) (4,093) -0- (165.615 ) $ 18.030 $ (1,418) $ -0- $ 16.612 7. General obligation bonds payable A summery of changes in general obligation bonds payable for the year ended June 30, 1994 is as follows: Payments Beginning and other End of Yeer Addttions Decrenses of Year General Obligation Bonds Series of 1992 $ 8,390,000 $ -0- $ (80,000) $ 8,310,000 Series of 1989 6,266,117 427,237(a) (140,000) 6,553,354 Series of 1984 635.000 -0- (635.000) .0- $ 15,291.117 $ 427.217 $ (855.000) $ 14.863.354 (a) Represents nccreted Interest on Capital Appreciation Bonds. - 16 - . EAST PENNSBORO AREA SCIIOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd,) JUNE 30, 1991, 7. General obligation bonds payable (Cont'd.) A. General Obligation Bonds, Series of 1984 - Proceeds of this issue, together with certain other available funds were placed in an Escrow Account for the beneflt of the holders of the East Pennsboro Township School Authority Revenue Bonds, Series of 1965, 1968 and 1973. Funds placed in the Escrow Account were used to purchase United States Treasury Securities . State and Local Government Series which will provide for payment of Authority Revenue Bonds outstanding. These bonds, which mature annually August 1 of each year through the year 2000, pay interest at annual rates ranging from 6% to 9.50%. B. General Obligation Bonds, Series of 1989 - Proceeds of this issue were applied in part to refund the District's General Obligation Bonds, Series of 1987, with the remainder used to pay certain costs of the refunding program and to fund other capital improvements to facilities owned by the District. As part of the refunding program, funds were irrevocably deposited into an Escrow Account. The Escrow Agent used these funds to purchase United States Treasury Securities - State and Local Government Series in such amounts and maturities to satisfy interest payments on the 1987 Bonds and retire all outstanding 1987 Bonds on the September 1, 1992 call date. The General Obligation Bonds, Series of 1989 consist of Capital Appreciation Bonds. Interest accreted through the March 1 payment date of each year on the Capital Appreciation Bonds is added to the carrying value. G. General Obligation Bonds, Series of 1992 . Proceeds of this issue are being used to design, construct, furnish and equip a new elementary school. The net proceeds were deposited in the Capital Projects Fund where they are available to pay the costs of the elementary school construction project. These bonds, which mature annually September 1 of each year through the year 2012, pay interest at annual rates ranging from 2.70% to 5.80\, - 17 . E/\ST I'ENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cone'<1.) JUNE 30, 1994 7. General oblIgaeion bonds payable (Cone'd.) Maeurieies due tn fueure yoars aro as follows: Series of 1989 Capital Sorios Appreciation Y.w: IiU..!ll of 1992 Bonds (1) 1994-95 $ 960,000 $ 145,000 $ 815,000 1995.96 965,000 150,000 815,000 1996-97 970,000 160,000 810,000 1997-98 975,000 165,000 810,000 1998-99 980,000 170,000 810,000 1999.2012 13 . 170.000 7.520.000 5,650.000 Toeals $ 18,020,000 $ 8 , 310.000 $ 9.710.000 (1) Reflects final macuriey value of Capica1 Appreciaeion Bonds. Fueure debe service requiromenes are as follows: Series of 1989 Capica1 Series Appreciation Year Total of 1992 Bonds 1994-95 $ 1,410,993 $ 595,993 $ 815,000 1995-96 1,410,750 595,750 815,000 1996-97 1,409,580 599,580 810,000 1997-98 1,407,630 597,630 810,000 1998.99 1,405,090 595,090 810,000 1999-2012 16,925.042 11.275.042 5.650.000 Toea1s $ 23.969.085 $ 14,259.085 $ 9 , 71 0 . 000 8. Compensaeed absences During the year ended June 30, 1994. tho Districe changed its method of accounting for compensated absences, adopting the provisions of Governmental Accounting Standilrds Board Seatemene Number 16. Under this method, compensated absences are accrued only to ehe exeene thae ie is probable that the District will compensaee ies employees for ehe unused benefies through cash payments conditioned on the employees eermination or retirement. . 18 . " EAST PENNSBORO AREA SCIIOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 3D, 1991_ 8. Compensated absences (Cont'd.) At June 30, 1994, the General Long Torm Debt group of accounts includes a liability for compensated absences of $ 355,245. Payment. for compensated absences are made through Genoral Fund expenditures in the year the absence is used or the employee retires. When an employee retires with unused compensated absencos, the District's payout policy is as follows: Emergency and personal - no payout required Vacation (administrative personnel only) . unused vacation days (not to exceed 5 days) are paid at the time of separation Sickness - no payout required Personnl days unused personal days (not to exceed 5 days) are paid at a rate equal to the average rate paid to substitute teache rs Retirement with 20 or more years of service retiring professional employees with 20 or more years of service with the District are eligible to receive a $ 3,000 retirement bonus. In addition, retiring full time professional employees with at least 30 years of experience including at least 15 years with the District may be entitled to a retirement incentive bonus of between $ 1,000 and $ 10,000 depending on age and total years of experience 9. Pension Plan All full time District employees and part time employees with at least 80 days or 500 hour. of service yearly, are eligible to participate in The Public School Employees' Retirement System of Pennsylvania ("System"), a cost. sharing multiple. employer defined benefit pension plan. Employees who retire at age 62, or age 60 with 30 years of service, or with 35 years of service regardless of age, are entitled to a retirement benefit, payable monthly for life, equal to 2% of their flnal average salary times years of service. Beneflts vest on reaching 10 years of service. Th.. System also provides for early retirement at age 55 and for death and disability benefits. Effective July 1992, health insurance premium assistance of $ 55 per month is provided for retirees receiving disability beneflt or credited with at least 24.5 years of service. Covered employees are required by State statute to contribute a percentage of their salary to the plan. This percentage is 5.25% for employees hired on or before July 22, 1983, and 6.25% for employees hired after that date. The District and State percentage. were equal at 6.585% for the year ended June 30, 1994. This decreases to 5.53% as of July 1, 1994. The District's contribution for the year was $ 561,481, - 19 . . E,\S'r PENNSBOIW ,\In:A SCHOOL IlIS'rRIC'r NOTES TO FINANCIAL STATEl1ENTS (Cont'd.) JUNE )0, 1994 9. Pension Plan (Cont'd.) The pension benefit obligation, which is the actuarial present value of credited projected benefits, is a standardIzed measure of the present value of pension benefits, adjusted for the effects of 1','oJected salary increases and any step. rate benefits, estimated to be payable in the future as a result of employee se~vice to dace. The measure is intended to help users assess the retirement system's funding status on a gotng.concel'n basis, assess progress made in accumulating sufficient asset. to pay benefits when due, and make comparisons among public employee retirement systems. As of June 3D, 1992, the most recent actuarial valuation date, the System's pension benefit obligation, as calculated in accordance with GASB Statement No.5, totalled $ 22.87 billion. Net assets available for benefits as of the same date totalled $ 19.59 billion. The unfunded pension obligation under GASB Statement No.5 totalled $ 3.28 billion. Total contributions to the System from all participating employers for the fiscal years ended June 30, 1992 and 1993 were $ 0.96 billion and $ 0.97 billion, respectively. Ten-year historical trend information shO\~ing the System's progress in accumulating sufficient assets to pay benefits when due is presented in the System's Comprehensive Annual Financial Report. 10. Management services The cafeteria facilities of the District were operated by a third party vendor. Under the terms of the contract, the vendor provides for the operation and maintenance of food services as required by law, with the policies subject to the approval of the District. Operating costs, management fees and administrative costs are billed monthly to the District. 11. Other post-employment retirement benefits The District offers one post-employment benefit to retired professional employees other than pension benefits as discussed in Note 9. For employees with twenty or more years of service to the District, the District will pay the basic medical insurance premiums for five years (excluding family coverage) following retirement. This benefit amounted to approximately $ 27,000 during the year ended June 30, 1994 and covered 15 eligible retired employees. The District does allow other employees not eligible for this benefit to remain in its group medical insurance plan upon payment by the retired employee of the cost of such coverage. - 20 - EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Conc'd,) JUNE 30, 1994 12. Risk managemenc The Discricc is exposed Co various risks of loss relaced Co corcs; cheft of, damage co, and descruction of asseCs; errors and omissions; injuries to employees; and natural disasters. The District maintains commercial insurance coverage covering each of chose risks of loss. Management believes such coverage is sufficient to preclude any significant uninsured losses to the District. Settled claims have noC exceeded chis rommerclal coverage in any of the past three fiscal years, For purposes of unemployment compensation laws, the District has elected not to be covered by the Pennsylvania Unemploymenc Compensation Fund. Any unemployment claims are paid by che District on a quarterly basis as incurred. The District is a member of a group of School Districts who have joined together to self-insure cheir workers' compensation exposure. The District pays annual contributions co the group based on a formula utilizing the District's own claim experience and annual payroll, Claims in excess of the District's retention experience are paid by a Cencral Fund within the group and, if necessary, by an insurance company carrying excess liabllity coverage. 13. Commitments and contingencies The collective bargaining agreement between the District and the teaching staff expires on August 31, 1996. The General Fund balance sheet does not reflect materials and supplies received but not paid for prior to June 30, 1994 which are budgeted for the year 1994- 95. The District is contingently liable for repayment of its prorated share of two bond issues outstanding which were incurred by the Cumberland Perry Area Vocational Technical School and the Harrisburg Area Community College. These organizations provide for debt service in cheir annual budgets. In addition; the District is contingently liable for repayment of the refunded Authority Revenue Bonds, Series of 1965, 1968 and 1973, as explained in Note 7. The total refunded bonds outstanding ac June 30, 1994 amounted to $ 3,025,000. The Discricc, during che normal course of business, is subject to numerous disputes and claims, AC June 30, 1994, the District is named as a party in actions for which the potential liability cannot presently be determined, District managemenc feels that the accions are generally without merit and they intend to vigorously contesc the claims, It is management's opinion that the ultimate outcome of che actions will not have a material affect on the District's financial posicion, - 21 .