Waynesboro Area School District June 30, 2017 Audit Presentation - - PowerPoint PPT Presentation

Waynesboro Area School District June 30, 2017 Audit Presentation

• Presentation by Smith Elliott Kearns & Company, LLC

– Kevin B. Stouffer, CPA

www.sek.com 1

Waynesboro School District June 30, 2017 Audit Presentation

• Please refer to reports for complete details:
• Annual Financial Report
• Including Independent Auditor’s Report
• Management Letter
• Communications with Those Charged with Governance

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Waynesboro School District June 30, 2017 Audit Presentation

• Summary

‐ Unmodified audit opinion. ‐ General Fund had a positive change in fund balance. ‐ No findings.

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Waynesboro School District June 30, 2017 Audit Presentation

• Independent Auditor’s Report:

‐ Unmodified Opinion

‐ What does this mean?

‐ The financial statements are fairly presented in all material respects.

‐ What it isn’t:

‐ This is not an opinion on internal controls. ‐ This is not an opinion on or results of a fraud investigation.

• Management’s Discussion and Analysis:

− Unaudited information prepared by the District with comparative analysis.

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Governmental Activities – Full Accrual

(Summary excerpt from financial statements)

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June 30, 2016 June 30, 2017

Current Assets $ 22,383,220 $ 18,164,463 Noncurrent Assets 63,741,333 68,314,309 Deferred Outflows of Resources 7,434,496 17,609,042 Total Assets and Deferred Outflows of Resources 93,559,049 104,087,814 Current Liabilities 10,839,537 11,900,971 Noncurrent Liabilities 120,127,372 130,449,484 Deferred Inflows of Resources 987,296 1,171,060 Total Liabilities and Deferred Inflows of Resources 131,954,205 143,521,515 Net Position ($ 38,395,156) ($ 39,433,701)

Governmental Activities – Full Accrual

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• Government‐Wide Highlights:

– Capital Assets increased due to the middle school project. – Deferred Outflow of Resources increased due to the activity related to the net pension obligation. – Noncurrent Liabilities increased due to the net pension

• bligation.
• However, regular debt payments were made during the year.

General Fund Analysis

(Summary excerpt from financial statements)

2015‐2016 2016‐2017 2016‐2017 Final Budget Variance with Final Budget Local Revenues $ 28,516,115 $ 30,136,596 $ 29,251,237 $ 885,359 State Revenues 23,109,875 24,271,009 22,864,722 1,406,287 Federal Revenues 990,184 1,194,850 1,186,273 8,577 Total Revenues 52,616,174 55,602,455 53,302,232 2,300,223 Instruction 34,846,988 35,819,559 35,251,974 (567,585) Support Services 13,254,606 13,962,162 13,046,519 (915,643) Operation of Noninstructional Services 927,420 942,422 925,654 (16,768) Facilities Acquisition, Construction and Improvements 556,851 136,935 70,000 (66,935) Debt Service 3,942,445 3,764,710 3,912,731 148,021 Total Expenditures 53,528,310 54,625,788 53,206,878 (1,418,910) Fund Transfers & Other 917,466 566,412 500 565,912 Budgetary Reserve (95,854) 95,854 Total Other Financing Uses 917,466 556,412 (95,354) 661,766 Change in Fund Balance $ 5,330 $ 1,543,079 $ $ 1,543,079

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General Fund Analysis

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• Revenues had the following fluctuations:

– Local Revenue was more than budget due to additional collections of delinquent taxes. – State Revenue was more than budget due to the uncertainty of the state funding due to the state budget impasse.

• Expenditures had the following fluctuations:

– Actual expenditures exceeded the budget by $ 1.4 million due to offsetting revenues noted above. – Retirement expenditures increased approximately $ 1.1 million due to the increased PSERS rate.

Food Service Fund

(Summary excerpt from financial statements)

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2015‐2016 2016‐2017

Operating Revenues $ 922,718 $ 806,023 Non‐operating Revenues 1,436,065 1,474,192 Transfers In(Out) Revenues and Transfers 2,358,783 2,280,215 Food and Milk Purchases 933,839 910,193 Salaries and Benefits 1,056,913 1,189,657 Other Expenses 183,448 226,088 Total Expenses 2,174,200 2,325,938 Change in Net Position $ 184,583 $ (45,723)

Food Service Fund Analysis

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• Operating revenues decreased despite raising the meal

prices.

• Subsidies (federal and state reimbursements)

increased due to more free and reduced meals.

• Expenses increased due to:

– Benefits (increase in PSERS rate and recording of the increase in the net pension obligation).

• Also, during the 2016‐2017 fiscal year, the Food Service

Fund partially repaid the General Fund for Middle School kitchen equipment as part of the renovations. The remaining amounts will be paid back in future years.

Medical Insurance Fund Analysis

(Summary excerpt from financial statements)

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2015‐2016 2016‐2017

Operating Revenues $ 5,533,436 $ 6,319,442 Non‐operating Revenues 2,228 2,469 Total Revenues 5,535,664 6,321,911 Medical Insurance Claims 5,651,265 4,336,204 Stop Loss Premiums 478,810 414,536 Administrative Fee 376,599 371,665 Total Expenses 6,506,674 5,122,405 Change in Net Position ($ 971,010) $ 1,199,506

Graphical Analysis

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(60,000,000) (40,000,000) (20,000,000) 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000 140,000,000 160,000,000 2015 2016 2017

Governmental Activities Assets, Liabilities, Net Position

Total Assets and Deferred Outflows of Resources Total Liabilities and Deferred Inflows of Resources Net Position

Graphical Analysis

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5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 Taxes Investment Income Local Revenue State Sources Federal Sources

General Fund Revenue Breakdown

2013 2014 2015 2016 2017

Graphical Analysis

14 48% 6% 43% 2% 1%

Revenue Breakdown ‐ WASD (2015‐ 2016)

Taxes Other Local State Sources Federal Sources Other 60% 2% 35% 2% 1%

Revenue Breakdown ‐ LIU Schools (2015‐ 2016)

60% 2% 33% 2% 3%

Revenue Breakdown ‐ Schools with $51 ‐ $75 Million of Revenue (2015 ‐ 2016)

Graphical Analysis

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5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 Instruction Support services Operation of noninstruction services Facilities, acquisition and improvements Debt service and transfers

General Fund Expenditure Breakdown

2013 2014 2015 2016 2017

Graphical Analysis

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5,000,000 10,000,000 15,000,000 20,000,000 25,000,000

Salaries Employee Benefits Purchased Property and Technical Services Purchased Property Services Other Purchased Services Supplies Property Debt Service Other Objects

General Fund Expenditure Object Breakdown

2013 2014 2015 2016 2017

Graphical Analysis

17 40% 23% 6% 3% 15% 3% 1% 4% 5%

Expenditure Breakdown ‐ WASD (2015‐ 2016)

Salaries Benefits Purchased Professional and Technical Services Purchased Property Services Other Purchased Services Supplies Property Debt Interest, Other Debt Principal, Transfers

41% 24% 7% 2% 12% 3% 1% 3% 7%

Expenditure Breakdown ‐ LIU Schools (2015‐ 2016)

42% 24% 6% 2% 10% 3% 1% 3% 9%

Expenditure Breakdown by Object ‐ Schools with $51 ‐ $75 Million of Expenditures (2015 ‐ 2016)

Graphical Analysis

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(2,000,000) ‐ 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 General Fund Capital Projects Fund Capital Reserve Fund Food Service Fund Medical Insurance Fund

Fund Balance and Net Position Comparison

2013 2014 2015 2016 2017

Graphical Analysis

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$11,637 $14,631 $14,349

$‐ $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 Waynesboro Area School District LIU Schools All PA School districts

Expenditures per Average Daily Membership (2015‐2016)

Graphical Analysis

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0.76% 7.75% 6.71%

0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% Waynesboro Area School District LIU Schools All PA School Districts

Unassigned Fund Balance as a Percentage of Expenditures (2015‐2016)

Schedule of Expenditures

• f Federal Awards
• Notes to Schedule of Expenditures of Federal

Awards.

– Total Federal Expenditures $ 3,057,391. – Program tested under Single Audit was the Child Nutrition Cluster.

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Schedule of Findings and Questioned Costs

• Findings – Financial Statement Audit

– None

• Findings and Questioned Costs – Major Federal

Award Programs Audit

– None

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Management Letter

• Purpose of Letter

– Recommendations and best practice ideas.

• Proper Reconciliation of Food Service Revenues.
• Proper Recording of Federal Revenue.
• Proper Reporting of Audit Adjustments.
• IT Access – Administrative Rights to Accounting Software.

– Summary of new standards that will affect the District.

• Recently Released GASB’s.
• Uniform Grant Guidance – Procurement.
• Auditor Involvement with Exempt Offerings.

– Graphical Analysis.

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Communication with Those Charged with Governance

• Required communications related to the audit.

– Includes the qualitative aspects of accounting practices, a description of any difficulties encountered during the audit, a description of any disagreements with management. – Attached to the letter are the adjustments made for the audit, some prepared by management, others for the conversion to full accrual for financial statement presentation. – Also, addresses management representations, management consultations with other independent auditors, and other audit findings or issues.

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Summary

‐ Unmodified audit opinion ‐ General Fund had a positive change in fund balance ‐ No findings ‐ Questions

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