Pequea Valley School District 2017 Audit December 14, 2017

Introduction Independent Auditors’ Report for the year ended June 30, 2017 Management’s Discussion and Analysis. Unaudited information prepared by John Bowden, Chief of Finance and Operations. Government Wide Statements - Full accrual basis statements.

Governmental Activities Historical Analysis June 30, 2015 June 30, 2016 June 30, 2017 Current Assets 19,399,886 20,369,217 16,747,960 Noncurrent Assets 43,295,306 42,382,105 40,826,953 Total Assets 62,695,192 62,751,322 57,574,913 Deferred Outflow of Resources 2,953,492 3,276,470 9,153,453 Current Liabilities 7,098,192 9,322,192 6,865,240 Noncurrent Liabilities 53,445,278 52,820,831 55,921,363 Total Liabilities 60,543,470 62,143,023 62,786,603 Deferred Inflow of Resources 3,438,324 1,118,000 1,031,000 Total Net Position 1,666,890 2,766,769 2,910,763

Historical and Budget to Actual Analysis

General Fund Results 2015 2016 2017 - Actual 2017 – Final Budget Local Revenues 24,912,939 25,122,585 26,401,750 25,786,356 State Revenues 6,726,292 6,972,240 8,495,424 7,751,030 Federal Revenues 1,417,358 1,329,446 1,378,277 1,150,957 Total Revenues 33,056,589 33,424,271 36,275,451 34,688,343 % Increase 2.0% 1.1% 8.5% Instructional Services 16,247,357 16,779,069 18,034,360 18,389,936 Instructional Student Support 3,416,753 3,732,352 3,853,601 3,955,081 Admin & Financial Support 2,474,295 2,855,517 3,022,198 2,879,641 Operation & Maintenance 2,838,638 2,657,185 2,836,370 2,882,057 Student Transportation 1,987,188 2,376,574 2,295,373 2,155,731 Student Activities 630,477 599,550 646,693 709,891 Community Services 35,363 32,447 35,435 18,582 Debt Service Principal -0- 65,930 Total Expenditures 27,630,071 29,098,624 30,789,960 30,990,919 5.8% 5.3% Excess of Revenues over Expenditures 5,426,518 4,325,647 5,485,491 3,697,424

General Fund Results 2015 2016 2017 - Actual 2017 – Final Budget Excess of Revenues over Expenditures 5,426,518 4,325,647 5,485,491 3,697,424 Fund Transfers 5,750,103 3,957,773 6,127,523 4,147,545 Other Uses (Sources) (27,264) (278,140) (4,463) 400,000 Total Other Financing Uses 5,722,839 3,679,633 6,123,060 4,547,545 Change in Fund Balance (296,321) 646,014 (637,569) (850,121) Ending Fund Balance 11,226,579 11,872,593 11,235,024

Capital Projects Fund Fiscal Year Fund Additions Expenditures Ending Fund Balance 2016-17 2,123,991 1,573,685 2,071,738 2015-16 9,519 1,307,794 1,521,432 2014-15 1,006,216 1,181,799 2,819,707

GASB No. 54 – Fund Balance Reporting and Governmental Type Definitions General Fund Capital Project Fund Nonspendable Prepaid Expenses 68,530 -0- Committed (Board) for Future Retirement Contributions 5,300,000 Committed (Board) for Future Health Care Costs 2,900,000 Assigned for Future Capital Outlays 2,071,738 Unassigned (Residual general fund balance) 2,966,494 Total 11,235,024

Food Service Fund 2014-15 2015-16 2016-17 Operating Revenues 261,900 85,141 202,964 Non-operating Revenues 466,493 609,363 543,970 Revenues 728,393 694,504 746,934 Salaries and Benefits 180,918 177,228 214,170 Purchased Services 263,156 261,293 221,234 Supplies 307,293 403,746 291,573 Depreciation 41,349 38,865 28,527 Total Expenses 792,716 881,132 755,504 Change in Net Position (64,323) (186,628) (8,570)

Internal Service Fund 2014-15 2015-16 2016-17 Charges for Services 2,537,601 2,796,034 3,416,245 Employee Benefits 2,992,102 3,719,233 3,872,246 Non Operating Revenues 971 2,560 2,013 Interfund Transfers 1,000,000 -0- Change in Net Position 546,470 (920,639) (453,988)

Pending Changes in Accounting Principles GASB Statement No. 75 - Accounting and Financial Reporting for Postemployment Benefits Other than Pensions (OPEB) Improve accounting and financial reporting for state and local government Required recordation of unfunded actuarial accrued liability upon implementation on the GW financial statements and proprietary funds Requires recordation of the School District’s proportionate share of PSERS liability for premium assistance plan Changes to assumptions used by the actuaries to calculate the OPEB liability Effective for the School District’s June 30, 2018 financial statements and will include additional footnote disclosures and required supplementary information

Other Financial Statement Components Notes to Financial Statements Note 1 - Summary of Significant Accounting Policies Note 10 – Long-Term Debt Note 15 – Defined Benefit Pension Plan Supplemental Schedules provide additional detail to basic financial statements Single Audit (Compliance Audit of the School District’s Federal Grants) and Related Reports

PSERS Pension Reform As of 6/30/16, PSERS plan was approximately 50% funded (about $50 billion unfunded liability) PV’s proportionate share .0886% Normal Cost 8.31 Unfunded Liability 20.89 Premium Assistance .83 30.03%

Single Audit Compliance audit of federal awards Major programs tested were Special Education Grants, Child Nutrition and Title II No findings or questioned costs

This presentation is intended solely for the information and use of the management of Pequea Valley School District and the School Board and is not intended to be and should not be used by anyone other than these specified parties.

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