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HomeMy WebLinkAbout94-06552 l' ~ .en d1 - . ci . c H ! J ((S ~ ~ -::;. 0- ./ ~f Iu-, ti'f. L n-,L ~ , C? .1.lIV fJ. ~ c.... t.D 1 10 (.\ \) i ~. ..';; = <=> -< --J - .. BIG SPRING SCHOOL DISTRICT ,.. &' :L~ = NEWVILLE, PENN~YLVANIA JUNE 30, 1994 :,. ;.. -< :"( ~ u:J .c. ~ Page Number Independent auditors' report 1 Combined balance sheet . all fund types and account groups June 30, 1994 2 Combined statement of revenue, expenditures and change a in fund balances . All Governmental Fund Typea . year ended June 30, 1994 3 Statement of revenue, expenditures and changes in fund balances - actual and budget . General and Athletic Funds. year ended June 30, 1994 4. 5 Statement of revenue, expenses and changes in fund balance/retained earnings . Food Service Fund. year ended June 30, 1994 6 Statement of cash flows . Food Service Fund . year ended June 30, 1994 7 Notes to financial statements - June 30, 1994 8 - 17 GREENAWALT & COMPANY, P.C. c.lDWAl1J IOOIlU, Jk. "'WI!I B. LYONS J{UWAIO l. ORII!HAWALT C.llOON l. HOPP'MAN MfClIABU una JOlIN II. IUNOU1, Ja. nlnOR^1l J.IC.BLLY a, A. OJUlIHAWALT (1916.1"1) A. A. UIDINOIIR IUTIllO) CI!ATIPII!D PUBLIC ACCOUNTANTS P,Q. Bo, 6 400 WEST MAlN ST.'''' M'CHANlCSftUIlQ. PENNSYLVANIA 17055 t71711ea.4n3 FAX 17171 7aa.2731 DaANCHOrrICI: '2 W11lTroMJ'J\lTnUIT 'AIUlt!.'" If01J (111')241"'U1 ''')((717)21''''11 INDEPENDENT AUDITORS' REPORT Board of School Directors Big Spring School District Newville, Pennsylvania Ws have audited the accompanying general purpose financial statements of Big Spring School District as of June 30, 1994 and for the year then ended. These general purpose financial statements are the responsibility of the District's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. Ws conducted our audit in accordance with generally accepted auditing standards. Those stsndards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation, We believe that our audit provides a reasonable basis for our opinion. In our opinion, the accompanying general purpose financial statements present fairly, in all material respects, the financial position of Big Spring School District as of June 30, 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 sccounting principles. ~~I?c, GREENAWALT & C~MP~, ~. October 19, 1994 Mechanicsburg, Pennsylvania . 1 . MEMn!RS _ AMERlCAlllllmnrm OF CERTIFIED PUBLIC ACCOlJl(J'AI/TS - PElIIIsvtVAII1^ IIISTI1Ul1l OF CERnFlED PUBLIC ACCOlJl(J'AI/TS ~ BIG SPRING SCHOOL DISTRICT COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30, 1994 Q Governmental Fund Tvnes Capital General Athletic Reserve Q? Assets Cash Inveatments, at cost Due from other funds Accounts receivable Delinquent taxes receivable (net of $ 218,051 allowance for uncollectibles) Inventories of supplies Food service equipment (net of $ 140,549 accumulated depreciation) Land, buildings and equipment Amount to be provided for general long-term debt $ 198,356 2,B29,788 33,056 577 ,454 $ 4,945 $ 1,370,378 o 400,000 65,000 . Total $ 4.103.654 $ 4.945 $ 1.370.378 Liabilities Payroll and benefits payable Accounts payable Deferred revenue Dua to other funds Due to student organizations General obligation bonds payable Compensated absences $ 1,268,777 108,661 347,865 2,935 $ $ ~ 979 32,077 . Total liabilities 1. 728.238 979 32.077 Fund equity Invested in inventories Invested in gsneral fixed assets Fund balances/retained earnings Reserved Unreserved 65,000 tt 2.310.416 2.375.416 $ 4.103.654 3.966 3.966 4.945 1. 338.301 1. 338.301 $ 1.370.378 Total fund equity ., Total $ The accompanying notes are an integral part of these financial statements. o . 2 - '-> Propr ie tary Fiduciary Fund 'rvoes Fund Tvoes Account Grouns Capital Food Ceneral General Projects Servtce Activitv Fixed Assets Lonll.Term Debt $ 100,051 $ 73,291 $ 108,179 $ $ 10,679 2,935 28,609 . 21,879 202,207 18,250,000 6.483.600 $ 110.730 $ 328.921 $ 108,179 $ 18.250.000 $ 6.483.600 $' $ 1,172 $ $ $ 51,000 9,268 108,179 5,675,000 54.969 808.600 51. 000 65 .409 108.179 -0- 6.483.600 18,250,000 59,730 147,238 116.274 59.730 263.512 -0- 18.250.000 -0- $ 110.730 $ 328.921 $ 108.179 $ 18.250.000 $ 6.483.600 BIG SPRING SCHOOL DISTRICT COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1994 Capital Capital General Athletic Reserve f.t21ects Revenue Local sources $ 8,760,732 $ 39,082 $ 21,185 $ 2,932 State sources 8,496,310 Federal sources 332,923 Other financing sources 248.164 Total revenue 17.589.965 287.246 21.185 2.932 Expenditures Instruction 10,535,931 Support services 5,469,110 45,696 Operation of noninstructional services 340,088 285,319 Facilities acquisition, construction and improvement services 55,863 25,103 Other financing uses 705.706 7.124 Total expenditures 17.050.835 285.319 108.683 25.103 Excess of revenue over (under) expenditures 539,130 1,927 (87,498) (22,171) Fund balances. July 1, 1993 1. 771. 286 2.039 1. 425.799 81.901 Fund balances, June 30, 1994 $ 2.310.416 $ 3.966 $ 1. 338.301 $ 59.730 The accompanying notes are an integral part of those financial statements, - 3 . e BIG SPRING SCIIOOL DISTRICT STATEMENT OF REVENUE, EXPENDITUIIES ANI) CHANGES IN FUND BALANCES . ACTUAl. AND BUIlGE1' GENERAL ANIl ATIILETIC FUNDS YEAR ENDED JUNE 30, 1994 o Gcnorll1 (;I Variance Favorable Actual Budl!o t {Unfavorable) Revenue Local sources $ 8,760,732 $ 8,397,108 $ 363,624 State aources 8,/,9~,3\0 8,358,7"', 137,566 0 Federal sources 332,923 290,695 42,228 Other ftnanc1ng sources Total revenue 17.58Q.965 17 .0/16.5/17 5/,3.418 Expenditurea Cl Instruction Regular programa 7,991,8011 7,995,870 4,066 Special programa 1,962,007 1,972,941 10,934 Vocational education programs 329,639 329,639 .0. Other inatructional programa 252,481 259,326 6,845 Adult education programs .0. 1.000 1.000 . Total instruction 10.535.931 10.558.776 22.845 Support services Pupl1 personnel 466,26/, 468,003 1,739 Instructional staff 49'),992 5011,022 4,030 . Administration 1,080,1,97 1,082,753 2,256 Pupl1 health 176,521, 180,248 3,724 Business 2611,280 280,943 16,663 Operation and maintensnce of plant services I, 71,0,181 1,758,491 18,310 Student transportation services 1,177,954 1,1811,756 6,802 ... Central services 1,1,533 111,533 .0. Other support services 21.885 21.885 .0. Total support services 5.1169.110 5.522.634 53.524 . (Continued) ,() . I, . e Athletic Varlance Favorable Actual Bud2et (Unfavorable ) $ 39,082 $ 39,000 $ 82 248.164 254.664 16.500) 287.246 293.664 16.418) -0- -0- -0- -0- -0- -0- o BIG SPRING SCIIOOL DISTIUCT STATEMENT 01' REVENUE, EXPENlllTUIU;S AND CHANGES IN FUND BALANCES . ACTUAl. AND BUDGET GENERAL AND ATIILETIC FUNDS (Cont' d. ) YEAR ENDED JUNE 30, 1991, o General 0 Varlanca Favorable Actuol 8\1deet (Unfavorable) ExpendItures (Cont' d, ) OperatIon of nonlnstructlonol C servIces Student actIvItIes $ 316,251, $ 323,822 $ 7,568 CommunIty servIces 23.831, 23.834 -0- Totol operotlon of non. InstructIonal servIceD 3/,0.088 347.656 7.568 . Other flnonclng uses Debt servIce 635,706 635,706 .0- Fund trsnsfers 70.000 70.000 -0- Total other fInancIng U3eR 705.706 705.706 -0- . Total expenditures 17.050,835 17.134.772 83.937 Excess of revenue over (under) expendItures 539,130 (88,225) 627,355 Fund balances, July 1, 1993 1. 771.286 1. 200.000 571. 286 0 Fund balances, June 30, 1994 $ 2.310.1.16 $ 1.111.775 $ 1.198.641 The accompanyIng notes ore on lntegrol pDrt of these flnancIol statements. . 5 . . Athletic Actual Bud~e t Variance Favorable (Unfavorable) $ 285,319 $ 293,664 $ 8,345 285.319 293.664 8.345 o -0- -0- -0- 285.319 293.664 8.345 1,927 -0- 1,927 2.039 .0- 2.039 $ 3.966 $ -0- $ 3.966 o BIG SPRING SCHOOL DISTRICT STATEMENT OF CASH FLOWS FOOD SERVIGE FUND YEAR ENDED JUNE 30, 1994 Operating activities Operating loss Adjustments to reconcile operating loss to net cash used in operating activities Depreciation Decrease (increase) in assets Due from other funds Accounts receivable Inventorles Increase (decrease) in liabilities Payroll and benefits payable Accounts psyable Deferred revenue Due to other funds Compensated absences $ (231,736) 20,202 (2,935) (27,179) 1,938 1,172 (76) (112) (49,159) 3.769 (284.116) Net cash used in operating activities Non capital financing activities Grants and subsidies State sources Federal sources Fund transfers (General Fund contributed services) 26,928 187,881 30.000 Net cash provided by non capital financing activities 244.809 Capital and related financing activities Purchase of equipment nO.885) Net decrease in cash (50,192) Cash, July 1, 1993 123.483 Cash, June 30, 1994 $ 73.291 Equipment purchases of $ 7,124 were paid for by the Gapital Reserve Fund, which was a noncash transaction to the Food Service Fund. The accompanying notes are an integral part of these financial statements. . 7 . BIG SPRING SCIIOOL DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991, 1. Reporting entity Big Spring School District is the level of government which has oversight responsibility and control over activities related to public school education, The report includes services provided by the District to residents within its boundaries: the Cumberland County Townships of Cooke, Lower Frankford, Upper Frankford, Lower Mifflin, Upper Mifflin, North Newton, South Newton, Penn and West Pennsboro, and the Borough of NewvUle. Services provided include a comprehensive curriculum for primary and secondary education as well as special education and vocational education programs. The District receives revenue from local, etate and federal sources and must comply with the requirements of these funding sources. Criteria established in Governmental Accounting Standards Board Statement Number 14 were used in determining the entities to be included in the reporting entity. These criteria include basic items such as financial interdependency, selection of governing authority, designation of management, abUity to aignificantly influence operations, accountability for fiscal matters, scope of public service and special financing relationships. All operations of the District are included in the reporting entity. There are no other component units that meet these criteria for inclusion in the reporting entity. 2. Summary of significant accounting policies The accounting records of Big Spring School District are maintained on the basis of accounting practices prescribed or permitted by the Hanual 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 accounting records of the District are organized on the basis of fund types and account groups. Each fund type may consist of several different funds. Each fund is a separate entity with self-balancing accounts which comprise its assets, liabilities, fund balance/retained earnings, revenues and expenditures/expenses as appropriate. The fund types and the account groups utilized by Big Spring School District are aa follows: Governmental Fund Tvoes . These are the funds through which most governmental functions are provided. The acquisition, use and belances of the District' s expendable financial resources and the related l1abUities (except those accounted for in proprietary funds) are accounted for through governmental funds The measurement focus is upon determination of changes in financial resourceo, rather than upon net income determination. The funds included in this category are: - 8 - o BIG SPRING SCIlOOL DISTRICT NOTF.S TO FINANCIAL STATEMENT (Cont'd.) JUNE 30, 1994 2. Summary of aignificant accounting policies (Cont'd,) Fund accounting (Cont'd.) General Fixed Assets. General Fixed Assets accounts for land, buildings and equipment, General Long.Term Debt . General Long-Term Debt accounts for general obligation bonds and compensated absences payable in future years. Basis of accounting Basis of accounting refers to when revenues and expenditures are recognized in the accounting records for reporting in the financial statements. Governmental Fund Tvoes - These funds utilize the modified accrual basis of accounting. Under this method, revenues are recorded when susceptible to accrual (both measurable and available), Available means collected within the current period or soon enough thereafter to pey current liabilities. Accrued revenue items include real estate taxes and intergovernmental revenues. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. Exceptions to thia general rule include principal and interest on general long. term debt which is recognized when due. Disbursements for inventory type items and prepaid expenses are considered expenditures at the time of purchase. Proorietarv Fund Tvoes . The Food Service Fund uses the Pennsylvania Department of Education prescribed "modified enterprise fund" method of accounting, which is a full accrual method of accounting. Doneted commodities are inventoried at an estimated value when received. Inventories (valued on the first-in, first-out method) are recorded as an asset, and the portion represented by donated commodities is recorded as deferred revenue. Food service equipment is capitalized, with depreciation (computed on the straight. line method using an estimated useful life of 12 years) recorded as an operating expense. The equipment (net of accumulated depreciation) is offset by a reserved portion of retained earnings, Compensated absences are recorded as operating expenses and the cumulative amount is recorded as a liability within the Fund. The liability is offset by a reduction in the reserved portion of retained earnings. . 10 - BIG SPRING SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENT (Cont'd.) JUNE 30, 1994 2. Summary of significant accounting policies (Cont'd.) Basis of accounting (Cont'd.) Fiduciarv Fund TVDes . These funds are custodial in natura (assets equal liabilities), which does not involve measurement of results of operations, and utilize the modified accrual basis of accounting. Account GrOUD. - Land, buildings (or at estimsted historical Depreciation is not computed on and equipment are cost if actual these assets. recorded st historicsl cost cost is not available). Long-term debt is offset by an amount to be provided by future taxation or other revenue sources. General obligation bonds payable in future years are recorded as District debt. Interest on these bonds is recorded when such interest is due. Compensated absences (those for which employees receive pay) are recorded using the termination payment method. A liability is recorded through the use of estimates which apply historical data to current factors. The District maintains records of unused leave and applies the contracted rate for employees eligible for termination payments. The District allows only restricted sabbatical leave snd therefore has no recorded liability in advance of the sabbatical. Budgets The District adopts, prior to the beginning of each fiscal year, an annual budget for the General Fund and Athletic Fund. A part of this budget process is the adoption of local tax rates, subject to various legal restrictions. The District approves subsequent budget revisions (primarily transfers between expenditure categories) as necessary. Unused appropriations expire at the end of each year, Revenue . Local sources Real estate, occupation, residence and per cspita taxes are levied as of July 1 with a legal, enforceable claim against the taxpayer and/or property. These taxes are recognized ss revenue when received during the fiscal year and also estimated to be received within sixty days sfter the close of the fiscal year. Taxes which are estimated to be received between sixty days and one year after the end of the fiscal year are recorded as deferred revenue. An allowance for uncollectibles is recorded for taxes estimated not to be collectible within one year after the end of the fiscal year. - 11 - . 11IG SPRING SCIIOOL DISTRICT NOTES TO FINANCIAL STATEHENTS (Cont' d. ) JUNE 30, 1994 3. Cash and Investments (Cont'd.) The Investments, whose market value approxImates cost due to the short term nature of the Investments, are cr.tegorIzed as follows: Pooled Investments $ 100,000 .0- 4.100.166 4.200,166 10.679 $ 4,210.845 Insured (FDIC) Collateral held In the DIstrIct's name Collateral not held In the DIstrIct's name The types of authorIzed Investments are lImIted by state regulatIons. Investment polIcies followed durIng the year dId not sIgnifIcantly alter the categorizatIon of Investments shown above. 4. Accounts receIvable Accounts receIvable at June 30, 1994 consIst of the followIng: Food General Service Fund Fund State sources $ 90,334 $ 3,105 Federal sources 46,586 25,380 Earned Income taxes 374,486 Other Items 66,048 124 $ 577.454 $ 28.609 5, DelInquent taxes receIvable Delinquent taxes receIvable and the related deferred revenue at June 30, 1994 consIst of the followIng: Real estate taxes OccupatIon, resIdence and per capIto taxes DelInquent taxes receIvable Allowance for taxes estImated not to be collectIble wIthIn one year EstImated to be collectIble wIthIn one year EstImated to be collectIble wIthIn sIxty days $ 374,982 243.069 618,051 Deferred revenue, delInquent taxes 218.051 400,000 60.000 340.000 $ . 13 - BIG SPRING SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 1991, 6. Land, buildings and equipment A summary of estimated changes in land, bulldings and equipment for the year ended June 30, 1994 is as follows: Julv 1. 1993 Additions Disoosals June 30. 1994 Land and bulldings $ 12,130,000 $ 120,000 $ $ 12,250,000 Equipment 5.910.000 130.000 140.000) 6.000.000 $ 18.040.000 $ 250,000 $ 140,000) $ 1!l...ll2...2Q!! 7. General obligation bonds payable A summary of changes in general obligation bonds payable for the year ended June 30, 1994 is as follows: Descriotion Julv 1. 1993 Redemotions June 30. 1994 1978 Series $ 35,851 $ 35,851 $ .0- 1992 Series 5.930.000 255.000 5.675.000 $ 5.965.851 $ 290.851 $ 5.675.000 The 1992 Series, with interest rates of 3.70% to 6.15%, is callable in whole or in part, on or after September 1, 1997. Scheduled debt service requirements are as follows: Year Ending June 30 Princioal Interest I2W 1995 $ 265,000 $ 307,148 $ 572 ,148 1996 275,000 297,342 572,342 1997 290,000 286,342 576,342 1998 300,000 273,728 573,728 1999 315,000 259,778 574,778 2000 2004 1,825,000 1,040,817 2,865,817 2005 - 2009 2.405.000 456.685 2.861.685 $ 5.675.000 $ 2.921.840 $ 8.596.840 In a prior year, the District legally defeased the 1989 Serles of general obligation bonds. All activity on the 1989 Series is under the control of the trust department of a financial institution. At June 30, 1994, $ 8,760,000 of bonds were outstanding, which were callable in September 1994. - 14 . BIG SPRING SCIIOOL DISTRICT NOTES TO FINANCIAL STATEHENTS (Cont'd.) JUNE 30, 1994 8. Compensdted absences A summary of changes in compensated absences for the year ended June 30, 1994 is as follows: July 1. 1993 Net Chan2e June 30. 1994 General Long-Term Debt $ 807.000 $ 1,600 $ 808.600 Food Service Fund $ 51. 200 $ 3.769 $ 54.969 Payments for compensated absences recorded in General Long-Term Debt are made through General Fund exponditures in the year the absence is taken or the employoe rotires. At rottremont or death, while in School District service, employees (with at least 10 years service in the School District) or their beneEiciades shall choose one of the follO\<Ing options (subject to a maximum of $ 8,000 for administrators and $ 6,500 for all other employees): 1. Accwnulated unused sick leave days times $ 50 per day 2. Number of full years of service in the District times $ 150 per year 9. Pension plan All full time District employees and part time employees with at least 80 days or 500 hours of service yearly, are eligible to participate in The Public School Employes' 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 final average salary times years of service. Benefits vest on reaching 10 years of service. The 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 a disability benefit 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 percentages 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 $ 604,065. - 15 - . . '" .:, .., BIG SPRING SGHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 1994 9, Pension plan (Cont'd.) The pension beneflt 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 projected salary increases and any step- rate benefits, estimated to be payable in the future as a result of employee service to date. The measure is intended to help users assess the retirement system's fundIng status on a going-concern basis, assess progress msde in accumulatIng sufflcient assets to pay beneflts when due, and make comparisons among publIc employee retirement systems. As of June 30, 1992, the most recent actuarial valuation date, the SY>ltem's pension beneflt 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 showing the System's progress in accumulating sufficient assets to pay benefits when due is presented in the System's Comprehensive Annual Financial Report. 10. Postemployment benefits other than pension benefits Under the negotIations agreement with Big Spring Education Association, the District shall provide for continuance of health care insurance after retirement until age 65. This health care insurance shall be at the retiree's expense, except that employees who retire after thirty or more years with the District, shall have up to five years of health care insurance benefits provided on the basis of the District paying 50\ of the cost and the retiree paying 50\ of the cost. The District finances this benefit on a pay-as-you-go basis. For the year ended June 30, 1994 the District incurred a total cost of $ 16,264 to provide this benefit to 10 participants. 11. Inter-fund transactions General Fund expenditures include the following contributed services and fund transfers: Student activities Athletic Fund Activity Fund Fund transfers Food Service Fund Athletic Fund $ 208,164 108,090 30,000 40,000 - 16 - BIG SPRING SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 1994 12. Risk management The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; snd natural disasters. The District maintains commercial insurance coverage covering each of those dsks of loss. Management believes such coverage is sufficient to preclude any significant uninsured losses to the District. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years. For State unemployment compensation lalls, the District is self-insured, which is a common practIce for local governmental units. Any unemployment claims are paid by the District on a quarterly basis as incurred. For workers' compensation insurance, over 50 Districts participate in a Gentral Fund for processing claims and obtaining reinsurance through commercial insurance carriers. Under thts plan, the District is required to pay the firat $ 400,000 of claims per year. For dental insurance coverage, the District pays claims plus an administration fee of 10.50% of claims. Claims coverage is limited to a maximum of $ 1,000 per person per contract year, 13. Commitments and contingencies In the normal course of business, the District is subject to legal disputes and claims. The District docs not anticipate any material losses from any pending or threatened litigation. In the normal course of preparing for the subsequent school year, the District has awarded bids for various supplies, fuel contracts, etc. No major commitments in excess of routine requirements have been made by the District. The District is also audited by the State's Department of the Auditor General, Findings, if any, from these audits could result in the repayment of funds, or the receipt of additional funds. In September 1994. the District ratified a five year negotiations agreement with Big Spring Education Association, which is scheduled to expire June 3D, 1997. These financial statements include the retroactive salary increases and related benefits for the school years ended June 30, 1993 and 1994. - 17 -