January 28, 2019 Audit Overview Audit in Accordance with: US - - PowerPoint PPT Presentation

Solanco School District 2017-18 Audit January 28, 2019

Audit Overview

• Audit in Accordance with:

– US Generally Accepted Auditing Standards – Government (Yellow Book) Auditing Standards – Uniform Guidance

• Audit of period 7/1/17 - 6/30/18
• Overview of Audit Process
• Audit Findings: No significant deficiencies or

material weaknesses are reported

GASBS No. 68, Pensions

Governmental Activities (98%) Business-type Activities (2%) Total Net Pension Liability 78,858,640 1,609,360 80,468,000 2017-18 Additional Pension Expense (in addition to contributions paid) 1,393,560 27,500 1,421,060 PSERS Net Pension Liability (NPL) 49,388,405,000 SSD’s Proportionate Share (%) 0.1630% SSD’s Proportionate Share ($) 80,468,000

PSERS Results of Operations

Fiscal Year June 30, 2017 Member Contributions 1,013,847,000 Employer Contributions 3,832,773,000 Total Contributions 4,846,620,000 Total Deductions (6,518,706,000) Gap (1,672,086,000) Investment Income (10.14%) 4,995,362,000 Change in Net Position 3,323,276,000

GASBS No. 75, OPEB

PSERS Net OPEB Liability (6.30.17) 2,037,412,000 SSD’s Proportionate Share (6.30.18) 3,320,000 Total OPEB Liability – 6.30.18 2,869,000

Single-Employer (Local) Plan PSERS Premium Assistance Plan

Prior Period Adjustment as of 7.1.17

Government Wide: ($3,807,000) Business-Type (Food Service): ($77,000)

Governmental Activities

Historical Analysis

June 30, 2016 June 30, 2017 June 30, 2018 Current Assets 25,672,295 28,395,516 38,740,955 Noncurrent Assets 38,439,441 37,780,225 47,652,116 Total Assets 64,111,736 66,175,741 86,393,071 Deferred Outflows of Resources 6,013,143 15,238,020 13,263,540 Current Liabilities 7,378,210 7,759,925 9,762,049 Noncurrent Liabilities 72,640,278 84,090,048 101,751,142 Total Liabilities 80,018,488 91,849,973 111,513,191 Deferred Inflows of Resources 960,970 1,073,077 2,278,937 Net Position (10,854,579) (11,509,289) (14,135,517)

General Fund Results For Fiscal Year Ended

2016 2017 2018 - Actual 2018 – Original Budget Local Revenues 30,968,739 32,280,588 33,078,968 33,073,242 State Revenues 18,311,720 19,527,031 19,806,794 20,004,057 Federal Revenues 2,062,082 2,039,305 2,145,726 2,108,401 Total Revenues 51,342,541 53,846,924 55,031,488 55,185,700 Instructional Services 31,099,335 33,066,257 33,471,881 36,143,242 Support Services 15,179,515 15,664,747 16,164,057 16,656,153 Operation of Noninstructional Services 992,917 1,014,167 1,126,230 1,118,758 Total Expenditures 47,271,767 49,745,171 50,762,168 53,918,153 Fund Transfers & Other Financing Uses (4,355,077) (3,596,823) (4,276,418) (3,645,000) Change in Fund Balance (284,303) 504,930 (7,098) (2,377,453) Change in Reserve for Inventory (27,196) (8,803) 45,027

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Ending Fund Balance 5,746,811 6,242,938 6,280,867 1,295,580

GASB No. 54 – Fund Balance Reporting and Government Type Definitions

General Fund Capital Project Fund Nonspendable (Not in spendable form) 322,451 11,052 Restricted (External)

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8,368,500 Committed (Board) 325,000

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Assigned (Board or Delegate) 2,253,777 12,470,840 Unassigned (Residual GF balance) 3,379,639

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Total 6,280,867 20,850,392

General Fund Expense Comparison

2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 20,000,000 2015-16 2016-17 2017-18

2017-18 General Fund Expenses

Salaries and Wages Employee Benefits Professional Services Repair and Maintenance Other Purchased Services Supplies Property & Equipment Other Transfer - Capital Project Fund

Special Education Analysis

2015-16 2016-17 2017-18 Total Expense 8,420,491 9,157,820 9,705,015 Total Enrolled Students 486 553 592 Total Expense Per Enrolled Student 17,326 16,560 16,394 % Increase in Expense 18.77% 8.76% 5.98% % Increase in Enrolled Students 13.79% 13.80% 7.10%

Capital Reserve Fund

Fund Balance June 30, 2016 June 30, 2017 June 30, 2018 Revenues: Investment Income 17,021 54,826 93,857 Other 310 185 185 Expenditures: Capital Outlay (1,600,107) (1,674,430) (1,262,995) Insurance Recoveries

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453,404 Transfer In: 4,362,962 3,600,000 2,326,642 Net Change 2,780,186 1,980,581 1,611,093 Beginning Fund Balance 6,342,930 9,123,116 11,103,697 Ending Fund Balance 9,123,116 11,103,697 12,714,790

Construction Project Fund

Fund Balance June 30, 2018 Revenues: Investment Income 86,971 Expenditures: Capital Outlay (11,008,919) Fiscal Charges (142,450) Proceeds from Issuance of Debt 19,200,000 Net Change 8,135,602 Beginning Fund Balance

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Ending Fund Balance 8,135,602

Cafeteria Fund Analysis

2015-16 2016-17 2017-18 Operating Revenues 660,234 614,563 583,146 Non-operating Revenues 1,037,614 1,072,621 1,035,693 Revenues 1,697,848 1,687,184 1,618,839 Salaries and Benefits 681,037 686,871 742,523 Supplies 791,340 778,314 758,466 Other Expenses 111,693 99,039 93,345 Total Expenses 1,584,070 1,564,224 1,594,334 Transfers In (Out)

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Change in Net Position 113,778 122,960 24,505 Number of Breakfasts Served 134,951 132,778 133,438 Number of Lunches Served 338,699 322,838 309,123

Internal Service Funds

2015-16 2016-17 2017-18 Additions and Transfers In 4,552,441 5,091,562 4,665,342 Expenses and Transfers Out 4,644,959 5,079,355 4,460,184 Change in Net Position (92,518) 12,207 205,158 June 30, 2016 June 30, 2017 June 30, 2018 Hospitalization 3,063,313 3,081,184 3,304,383 Unemployment Compensation 151,199 145,535 127,494 Net Position - Total 3,214,512 3,226,719 3,431,877

Composition of Net Position Changes in Net Position

Funding Sources for Health Insurance

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1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 5.50 2014-15 2015-16 2016-17 2017-18 Health Benefit Expenses in Millions Solanco School District Retiree Contributions Employee Contributions

Debt Service Fund

Issue Note Amount Final Maturity Date Interest Rate Principal Amount Outstanding at June 30, 2018 Series A of 2017 Note 9,300,000 April 1, 2027 2.53% 7,425,000 Series 2018 Note 9,900,000 April 1, 2029 3.09% 9,900,000 Series 2019 Note 10,000,00 April 1, 2029 3.02%

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17,325,000 Governmental Activities Balance 7/01/17 Additions Reductions Balance 6/30/18 General Obligation Debt

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19,200,000 1,875,000 17,325,000 Estimated Liability for Compensated Absences 506,139

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42,199 463,940 Estimated Liability for Accrued Retirement Bonus 909,304 83,320 30,295 962,329 Total Governmental Activities 1,415,443 19,283,320 1,947,494 18,751,269

Change in Long-Term Liabilities General Obligation Note Composition

Debt Service Requirements – Past and Future

500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000 5,000,000 Principal/Interest Payments Capital Reserve Fund Transfers

Other CAFR Components

• Management’s Discussion and Analysis
• Notes to Financial Statements

– Note 1- Summary of Significant Accounting Policies – Note 11- Long-term Liabilities – Note 14 – Other Post Employment Benefits (OPEB) – Note 17- Fund Balances – Note 19- Defined Benefit Pension Plan – Note 20- Contingencies and Commitments – Note 21 – Change in Accounting Principle – Note 22 – Subsequent Event

• 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 2016-17 2017-18 School Lunch/ Breakfast Program 942,500 889,924 Title I 1,702,608 1,771,873 Improving Teacher Quality 241,890 239,470 Special Education (via IU 13) 672,011 708,941 Other 13,794 50,318 Total Federal Grant Expenditures 3,572,803 3,660,526

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

• School Breakfast Program and National School

Lunch Program – lack of documentation in regards to communication with household applicants, resulting in incorrectly classified student

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

• ther than these specified parties.

LANCASTER OFFICE 1705 Oregon Pike, Lancaster, PA 17601 Phone 717-569-2900 · Toll Free 800-448-1384 · Fax 717-569-0141 CAPITAL REGION OFFICE 5000 Ritter Road, Suite 104, Mechanicsburg, PA 17055 Phone 717-697-2900 · Toll Free 800-448-1384 · Fax 717-697-2002

www.troutcpa.com