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

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 4,995,362,000 (10.14%) Change in Net Position 3,323,276,000

GASBS No. 75, OPEB Single-Employer (Local) Plan Total OPEB Liability – 6.30.18 2,869,000 PSERS Premium Assistance Plan PSERS Net OPEB Liability (6.30.17) 2,037,412,000 SSD’s Proportionate Share (6.30.18) 3,320,000 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 6,013,143 15,238,020 13,263,540 Resources 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 960,970 1,073,077 2,278,937 Resources Net Position (10,854,579) (11,509,289) (14,135,517)

General Fund Results For Fiscal Year Ended 2018 – Original 2016 2017 2018 - Actual 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 992,917 1,014,167 1,126,230 1,118,758 Services Total Expenditures 47,271,767 49,745,171 50,762,168 53,918,153 Fund Transfers & Other (4,355,077) (3,596,823) (4,276,418) (3,645,000) Financing Uses Change in Fund Balance (284,303) 504,930 (7,098) (2,377,453) Change in Reserve for (27,196) (8,803) 45,027 -0- Inventory 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 Capital Project Fund Fund Nonspendable 322,451 11,052 (Not in spendable form) Restricted -0- 8,368,500 (External) Committed 325,000 -0- (Board) Assigned 2,253,777 12,470,840 (Board or Delegate) Unassigned 3,379,639 -0- (Residual GF balance) Total 6,280,867 20,850,392

General Fund Expense Comparison 20,000,000 18,000,000 16,000,000 14,000,000 2015-16 12,000,000 2016-17 10,000,000 2017-18 8,000,000 6,000,000 4,000,000 2,000,000 0

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 17,326 16,560 16,394 Enrolled Student % Increase in Expense 18.77% 8.76% 5.98% % Increase in Enrolled 13.79% 13.80% 7.10% Students

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 -0- -0- 453,404 Recoveries Transfer In: 4,362,962 3,600,000 2,326,642 Net Change 2,780,186 1,980,581 1,611,093 Beginning Fund 6,342,930 9,123,116 11,103,697 Balance 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 19,200,000 Issuance of Debt Net Change 8,135,602 Beginning Fund -0- Balance Ending Fund 8,135,602 Balance

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) -0- -0- -0- 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 Changes in Net Position 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 Composition of Net Position 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

Funding Sources for Health Insurance 5.50 5.00 Health Benefit Expenses 4.50 4.00 Solanco School in Millions 3.50 District 3.00 Retiree 2.50 Contributions 2.00 1.50 Employee 1.00 Contributions 0.50 - 2014-15 2015-16 2016-17 2017-18

Debt Service Fund General Obligation Note Composition Principal Amount Note Final Maturity Interest Issue Outstanding at June Amount Date Rate 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 10,000,00 Series 2019 Note April 1, 2029 3.02% -0- 0 17,325,000 Change in Long-Term Liabilities Balance Balance Governmental Activities Additions Reductions 7/01/17 6/30/18 General Obligation Debt -0- 19,200,000 1,875,000 17,325,000 Estimated Liability for 506,139 -0- 42,199 463,940 Compensated Absences Estimated Liability for 909,304 83,320 30,295 962,329 Accrued Retirement Bonus Total Governmental 1,415,443 19,283,320 1,947,494 18,751,269 Activities

Debt Service Requirements – Past and Future 5,000,000 Principal/Interest Payments Capital Reserve Fund Transfers 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0

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 other 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