Swartz Creek Community Schools Audit Results June 30, 2016 Presented By: Jennifer Watkins, CPA Principal

Responsibilities District The district is responsible for the preparation and fair presentation of the financial statements in accordance with generally accepted accounting standards (GAAP); this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements.

Responsibilities Auditor The auditor’s responsibility is to express opinions on the 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 from material misstatement.

Audit Procedures Understanding internal controls Review of policies and procedures Risk assessment Substantive procedures Analytical procedures GASB 68 (MPSERS) testing Unpredictability Government Auditing Standards Grant compliance testing Other compliance testing Financial statement preparation Data Collection Form

Internal Control Evaluation Audit Results Internal Control Evaluation No material weaknesses noted No significant deficiencies noted An opinion is not expressed on internal controls Single audit Compliance with Federal guidelines Low risk auditee Special Ed Cluster Unmodified opinions No material weaknesses or material noncompliance noted

Governance Letter Required communication Significant estimates Ensured the estimates are reasonable and free from bias Useful lives of property and equipment Net pension liability and related deferred outflows and inflows of resources Regulatory items Uniform Grant Guidance Early warning legislation Uniform Budgeting and Accounting Act (UBAA)

Governance Letter Other required communications No disagreements with management No difficulties in performing the audit No uncorrected misstatements No significant audit adjustments

Audit Results Unmodified Opinion “Clean opinion” School's financial records and statements are fairly and appropriately presented, and in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Balance Sheet – Governmental Funds

Balance Sheet – Governmental Funds

Balance Sheet – Governmental Funds

Statement of Net Position – Capital Assets

Statement of Net Position – Long Term Debt

General Fund Comparison to Budget Year Ended June 30, 2016

General Fund Revenue (includes Transfers) Year Ended June 30, 2016

General Fund Expenditures (by function) Year Ended June 30, 2016

General Fund Expenditures (by object) Year Ended June 30, 2016

Ten Year Enrollment Trend Analysis

10 Year Foundation Allowance Trend Analysis

General Fund Balance * Unassigned category effective 2011-forward with adoption of GASB 54

General Fund Fund Balance 2016 2015 Fund Balance/Expenditures 6.9% 5.7% Fund Balance/Unrestricted Revenues 8.4% 7.0% 2016-17 budgeted fund balance use = $630,000 (26% of total fund balance)

MPSERS Rate History

Significant Upcoming Accounting Pronouncements GASB Statements No. 74 and 75 Accounting and Financial Reporting for Post Employment Benefit Plans Other Than Pensions District must record its proportionate share of the OPEB liability within the MPSERS Plan (similar to GASB68)

Future Challenges State economic/political condition Rising fringe benefit costs Retirement rate increase Eroding state revenue sources Enrollment trends OPEB – Rising healthcare costs Net pension liability - $53 million New accounting pronouncements Early Warning Legislation

And to the Swartz Creek Community Schools Thank you To Jeff Hall, Jon Pechette, Marilyn Zerka, and the Business Office staff for their assistance during the audit. And to the Swartz Creek Community Schools Board of Education Jennifer Watkins, CPA Mike Evrard, CPA jenwat@yeoandyeo.com micevr@yeoandyeo.com