1. BY: TONY GERHARZ, CPA WIPFLI LLP Management’s Discussion and Analysis: What you need to say

2. The Key Points Introduction Year to year comparisons Analysis of financial position  Discussion of the basic financial statements  Condensed GW financial information  Analysis of fund activities Analysis of budget to actual variations Description of capital asset and debt activities Description of known facts or conditions that are expected to have a significant affect on operations

3. Introduction Who wrote the MD&A? What is the purpose of the MD&A?

4. Year to Year Comparison – The Highlights Emphasize the current year! Discuss both positive and negative aspects of the year’s operations.  Reserves  Cash flows  Tax items  Mill levies  Valuation  Capital Improvements  Other postemployment benefits  Net pension liability  Multi-district cooperative agreements

5. The Basic Financial Statements Discussion on the district-wide financial statements  Accrual method of accounting  Be sure to use up to date terminology  Ask the auditor Check your numbers and percentages if you use them! Keys to keeping the reader’s attention…… sure  Give a general overview of what you are discussing  Be descriptive but concise  Keep it simple

6. The Basic Financial Statements Statement of Net Position  General Overview  Assets, Liabilities and Net Position Makeup of categories  A.The Statement of Net Position on Page 13 shows the assets, liabilities, and the net position of the school district. The statement categorizes assets to show that some assets are very liquid, such as cash and cash equivalents. Some assets are restricted for certain purposes or reserved for emergencies and cash flow purposes. Some assets are invested in fixed or capital assets, such as buildings, equipment and other long-lived property; and some assets are available to fund budgets of the following year. Assets exceed liabilities by $X,XXX,XXX as of June 30, 2016. For current year net position, capital assets and restricted net position compose 90% of the total of net assets and 10% are unrestricted or liquid. Last year capital assets and restricted net assets composed 90% of the total net assets and unrestricted or liquid assets comprised 10% of the total. This allocation has remained the same for the last four years. Deferred inflows and outflows if you have them

7. The Basic Financial Statements Statement of Activities  Discussion on revenue types  General  Program-specific  General overview of expenditure activity

8. Significant Fund Activities Discuss the major funds presented in the financial statements  How to determine major funds  Proprietary funds if you have them  Fiduciary responsibilities i.e. extracurricular accounts  Refer to the schedule of extracurricular activity Method of accounting  Governmental funds – modified accrual  Proprietary and Fiduciary funds – Full accrual Refer to the reconciliations included in the financial statements to determine what makes up the differences between the district-wide financial statements and the fund financial statements

9. Condensed Financial Information Keyword here is condensed! Summarize the district-wide statements only Make sure you update terminology if there has been guidance changes  Ask your auditor about this

10. Condensed Financial Information Statement of Net Position 20162015 Net Position: Current assets1,658,6261,963,018 Capital assets - net2,849,8562,628,943 Total assets4,508,4824,591,961 Deferred outflow of resources456,2040 Current liabilities95,943395,578 Non-current liabilities4,558,162268,238 Total liabilities4,654,105663,816 Deferred inflow of resources749,6820 Net position: Net investment in capital assets2,849,8562,628,943 Restricted for: Compensated absences11,44311,330 Other fund activities612,569494,832 Unrestricted(3,912,969)793,040 Total net position(439,101)3,928,145

11. Condensed Financial Information Statement of Activities 20162015 Revenues: Program revenues: Charges for services33,55935,866 Federal grants1,043,635977,170 State program funding81,96675,970 Other57,94357,944 Total program revenues1,217,1031,146,950 General revenues: Property taxes409,098525,093 County retirement distribution480,589710,182 State aid3,530,4943,406,390 Impact aid882,310514,623 Interest18,22018,357 Miscellaneous25,61517,836 Special items: Gain/(Loss) on asset disposal0(22,167) Total general revenues5,346,3265,170,314 20162015 Expenses: Regular programs3,294,9493,294,778 Special programs713,771753,487 Vocational programs147,766145,768 Adult education6,4074,982 Traffic education3,9794,885 Supportive services1,055,0881,129,527 Operations and maintenance531,158547,556 Student transportation371,617373,613 Food services310,542295,099 Extracurricular195,923189,526 Unallocated depreciation7,2057,614 Total expenses.6,638,4056,746,835

12. Budget to Actual Results Discuss any changes between the original, approved budget and the final budget  General description for any modifications Highlight any large variances between final budgeted amounts and the actual amounts for the year

13. Capital Assets and Debt Activity Capital Assets  Annual balance in each category i.e. land, buildings, etc.  General information on capital additions or disposed assets  Annual depreciation expense Debt Activity  Type of Debt i.e. Bonds, Capital Leases, Intercap loans  Include general information i.e. Maturity dates and interest rates  Outstanding amounts at year end Make sure to include your OPEB information and Pension information

14. Currently Known Information Make sure to highlight key changes that have happened or are expected to happen in the near future  Mill levies  Changes to tax base or valuations  Include significant items such as tax protests  Enrollment trends  Changes to state/federal funding

15. Contact Information for the District District Superintendent District Clerk/Business Manager Mailing/Physical Address Phone Number

16. Helpful References OPI  Finance & Grants  Accounting GASB34 Tab Model MD&A MD&A Checklist Samples Website address is: http://www.opi.mt.gov/Finance&Grants/schoolfinance/Index.html http://www.opi.mt.gov/Finance&Grants/schoolfinance/Index.html

17. Background on Presenter Tony Gerharz, CPA: Graduated: University of Iowa. 9+ years experience auditing governments including schools, cities, Indian tribes, Licensed in the State of Montana.

18. Questions Contact: 406-248-1681 tgerharz@wipfli.com