Solanco School District 2014-15 Audit January 25, 2016

Audit Overview Audit in Accordance with: US Generally Accepted Auditing Standards Government (Yellow Book) Auditing Standards US OMB Circular A-133 (Single Audit) Audit of period 7/1/14 - 6/30/15 Solanco Business Office drafts financial statements Overview of Audit Process Audit Findings: No significant deficiencies or material weaknesses are reported

GASBS No. 68, Pensions Effects the full-accrual financial statements Government-Wide Enterprise Fund (Food Service) 5 Pages of Footnote Disclosures 3 Pages of Required Supplementary Information

Governmental Activities Business-Type Activities GASBS No. 68, Pensions Implementation by Prior Period Adjustment of Equity Governmental Activities Business-Type Activities Total Beginning Net Position, Original 49,535,893 564,037 50,099,930 Effect of GASBS 68 (62,148,997) (1,268,347) (63,417,344) Beginning Net Position, Restated (12,613,104) (704,310) (13,317,414)

Governmental Activities (98%) Business-type Activities (2%) GASBS No. 68, Pensions PSERS Net Pension Liability (NPL) 39,580,717,000 SSD’s Proportionate Share (%) 0.1654% SSD’s Proportionate Share ($) 65,466,506 Governmental Activities (98%) Business-type Activities (2%) Total Net Pension Liability 64,157,176 1,309,330 65,466,506 2014-15 Additional Pension Expense (in addition to contributions paid) 1,556,592 31,767 1,588,359

Governmental Activities Historical Analysis June 30, 2013 June 30, 2014 June 30, 2015 Current Assets 21,349,010 22,842,063 21,992,309 Noncurrent Assets 39,761,248 38,761,504 38,991,241 Total Assets 61,568,212 61,603,567 60,983,550 Current Liabilities 9,494,997 9,483,742 5,949,405 Noncurrent Liabilities 5,268,257 2,583,932 66,911,938 Total Liabilities 14,763,254 12,067,674 72,861,343 Net Position 46,347,004 49,535,893 (11,426,206)

Relationship: Capital Assets vs. Debt

General Fund Results For Fiscal Year Ended 2013 2014 2015 - Actual 2015 – Original Budget Local Revenues 28,287,077 28,630,344 29,814,012 28,970,020 State Revenues 16,407,104 17,136,128 17,781,054 17,804,520 Federal Revenues 2,432,398 2,625,710 2,202,989 2,343,640 Total Revenues 47,126,579 48,392,182 49,798,055 49,118,180 Instructional Services 26,498,793 28,469,246 29,082,969 31,299,699 Support Services 12,927,985 13,661,206 14,568,451 14,608,836 Operation of Noninstructional Services 856,296 894,272 925,695 954,201 Total Expenditures 40,283,074 43,024,724 44,577,115 46,862,736 Fund Transfers & Other Financing Uses (6,809,135) (4,961,602) (4,854,745) (3,667,100) Change in Fund Balance 34,370 405,856 366,195 (1,411,656) Change in Reserve for Inventory (38,746) (59,138) 12,052 -0- Ending Fund Balance 5,333,345 5,680,063 6,058,310 4,268,407

GASB No. 54 – Fund Balance Reporting and Government Type Definitions General Fund Capital Project Fund Debt Service Fund Nonspendable (Not in spendable form) 425,987 -0- Restricted (External) Committed (Board) 2,280,263 Assigned (Board or Delegate) 6,342,930 Unassigned (Residual GF balance) 3,352,060 Total 6,058,310

General Fund Expense Comparison

2014-15 General Fund Expenses

Debt Service Fund Fund Balances June 30, 2013 June 30, 2014 Revenue and Transfers In: Investment Earnings 1 2 Transfer In 3,412,974 3,426,599 2,825,496 Expenditures and Other: Principal 3,065,000 3,200,000 2,750,000 Interest 346,475 225,100 75,000 Other 1,500 500 Net Change -0- (2) Beginning Fund Balance Ending Fund Balance Rental Subsidy Revenue 552,458 553,896 348,977 Net Debt Service Cost 2,860,517 2,872,704 2,476,523

Debt Service Requirements

Long-Term Obligations June 30, 2014 Additions Reductions June 30, 2015 General Obligation Bonds 2,750,000 -0- Unamortized Bond Issue Premium 11,047 Compensated Absences 798,530 40,646 25,065 814,111 Retirement Bonuses 461,203 12,020 30,369 442,854 Total 4,020,780 52,666 2,816,481 1,256,965

Capital Project Fund Fund Balance June 30, 2013 June 30, 2014 Revenues: Investment Income 6,783 4,995 7,430 Other -0- 185 360 Expenditures: Capital Outlay (823,538) (1,197,505) (2,517,386) Transfer In: 3,400,000 1,538,574 1,847,038 Net Change 2,583,245 346,249 (662,558) Beginning Fund Balance 4,075,994 6,659,239 7,005,488 Ending Fund Balance 6,342,930

Cafeteria Fund Analysis 2012-13 2013-14 2014-15 Operating Revenues 780,247 718,317 659,796 Non-operating Revenues 900,393 953,631 984,637 Revenues 1,680,640 1,671,948 1,644,433 Salaries and Benefits 738,564 697,306 691,567 Supplies 818,678 762,505 837,643 Other Expenses 119,628 81,430 73,583 Total Expenses 1,676,870 1,541,241 1,602,793 Transfers In (Out) -0- Change in Net Position 3,770 130,707 41,640

Internal Service Funds Changes in Net Position 2012-13 2013-14 2014-15 Additions and Transfers In 4,210,932 4,473,849 4,797,090 Expenses and Transfers Out 4,183,223 4,199,093 4,625,134 Change in Net Position 27,709 274,756 171,956 Composition of Net Position June 30, 2013 June 30, 2014 June 30, 2015 Hospitalization 2,681,386 2,962,951 3,143,296 Unemployment Compensation 178,932 172,123 163,734 Net Position - Total 2,860,318 3,135,074 3,307,030

Funding Sources for Health Insurance

Other CAFR Components Management’s Discussion and Analysis Notes to Financial Statements Note 1- Summary of Significant Accounting Policies Note 2- Change in Accounting Principle Note 12- Long-term Liabilities Note 16- Operating Lease Note 18- Fund Balances Note 20- Defined Benefit Pension Plan Note 21- Contingencies and Commitments Supplemental Schedules for additional analysis Single Audit (compliance audit of the School District’s federal grants) and related reports Introductory Section and Statistical Section are Unaudited

Schedule of Expenditures of Federal Awards Expenditures = Grant Revenue 2013-14 2014-15 School Lunch/ Breakfast Program 842,045 869,137 Title I 1,828,907 1,905,362 Improving Teacher Quality 251,301 249,817 Striving Readers (KTO) 366,178 -0- Special Education (via IU 13) 545,805 580,942 Other 17,251 12,229 Total Federal Grant Expenditures 3,851,487 3,617,487

Schedule of Expenditures of Federal Awards Report on Internal Control over Financial Reporting No Material Weaknesses or Significant Deficiencies Identified Report on Compliance with Requirements No Compliance Findings

This presentation is intended solely for the information and use of the management of Solanco 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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