Conemaugh Township Area School District Davidsville

Transcription

Conemaugh Township Area School District
West Campus Avenue
Davidsville, Pennsylvania 15928
Single Audit as required by
OMB Circular A-133
For the Year Ended
June 30,2014
Table of Contents
List of Report Distribution
2
Independent Auditors' Report
J
Management's Discussion and Analysis
5
Basic Financial Statements
Statement of Net Position..................
l5
l6
Statemsnt of Activities
t'/
Balance Sheet - Governmental Funds.........
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position........................ t8
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
l9
Reconciliation of the Statement of Revenues, Expenditures
20
and Changes in Fund Balances to the Statement of Activities
22
Statement of Net Position - Proprietary Fund
Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Fund
23
Statement of Cash Flows - Proprietary Fund
Statement of Fiduciary Net Position - Fiduciary Funds
Supplemental Information
Schedule ofRevenues, Expenditures and Changes in Fund Balance
Budget and Actual - General Fund
24
25
-
49
Schedule of Expenditures of Federal Awards and Certain State Grants
50
Report on Internal Control over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Støndards
54
Report on Compliance for Each Major Federal Program and on
Internal Control Over Compliance Required by OMB Circular A-133
56
Schedule of Findings and Questioned Costs.
58
KOTZAN CPA6L
Dennis
ASSOCIATES, P.C.
C¡mn¡o Pu¡ucAcclorxrnrrs &
Busnpss
P.
Koøan, CPA, CFF
Brenda A. Pawlowski, CPA, CFE
KimberþA. Dorchal<, CPA, CGFM
CoNsu-r¡m
MEMBER
AICPA . PICPA
List of Report Distribution
December 15,2014
To the Members of the Board
West Campus Avenue
Davidsville, Pennsylvania I 5928
Board Members:
Not later than thirty days after receipt of the audit report, Conemaugh Township Area School District must distribute
the audit report as follows:
One
(l)
copy to:
Commonwealth of Pennsylvania Bureau of Audits
(submitted electronicalþ
One
(l)
copy to:
Single Audit Clearinghouse
(submitted electronically)
Sincerely,
(,ot-¡¡,^.¡cQÀr 0¡¡o.
tr^-Ì
C'
fottYnCPA & Associates, P.C.
2
Budfield Street Professional Building
. 334 Budfield Street .
Suite 100
8L4-269-4972' Fax: 814-266-9577
www.kotzancpa.com
'
Johnstown,
PA
15904
KOTZAN CPAEL
Dennis
ASSOCTATES, P.C.
CmïR¡¡ fusuc Acmrxr¡Nrs &
Busnlsss
P.
Koøan, CPA, CFF
Brenda A. Pawlowski, CPA,
MEMBERAICPA. PICPA
CoNST.JLTANTS
Independent Auditors' RePort
West Campus Avenue
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type activities,
each major fund, and the aggregate remaining fund information of the Conemaugh Township Area School District
as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively
comprise the District's basic financial statcments as listed in the table of contents.
Mahagement's Responsibility for the Financial Statements
Management is responsible for the preparation and fairpresentation of those financial statements in accordance wit]¡
accounting principles generally accepted in the United States of America; this includes the design, implementation,
and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are
fres from material misstatement, whether due to fraud or eror.
Auditors' Responsibility
Our responsibilþ is to express opinions on these financial statements based on our audit. We conducted our audit
in accordance with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits cont¿ine d in Government Audíting Standards, issued by the Comptroller General of the
Úoit"¿ States. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
An audit includes performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or eror. In making those risk assessments,
the auditor considers internal confol relevant to the entity's preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entþ's internal control. Accordingly, we express no such opinion.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
Opinions
to above present fairly, in all material respects, the respective
financial position of the governmental activities, business-type activities, each major fund, and the aggregate
remaining fund information of the Conemaugh Township Area School District as of June 30, 2014, and the
respectivã changes in financial position and, where applicable, cash flows thereof for the year then ended in
In our opinion, the financial
st¿tements referred
accordance with accounting principles generally accepted in the United States of America.
3
. 334 Budfield Street .
814-269
-4912'
CFE
Kimberþ A. Dorchak, CPA, CGFM
Suite 100
Fax: 8t4-266-9577
www.kotzancpa.com
'
Johnstown,
PA
75904
Change in Accounting Principle
As discussed in Note 22 to the financial statements, in fiscal year 2014, the District adopted new accounting
guidance, GASB St¿tement No. 65, Items Previously Reported as Assets and Liabilities. Our opinion is not
modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion
and analysis and budgetary comparison information on pages 5 through 13 and page 49, respectively, be presented
to supplement the basic financial statements. Such information, although not a part of the basic financial statements,
is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.
We have applied certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of management about the
methods of preparing the information and comparing the information for consistency with management's responses
to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supp I ementary
Inþ rmation
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
the District's basic financial statements. The accompanyng schedule of expenditures of federal awards and certain
state grants is presented for purposes of additional analysis as required by U.S. Office of Management and Budget
Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the
basic financial statements. The schedule of expenditures of federal awards and certain state grants is the
responsibility of management and was derived from and relates directly to the underlying accounting and other
records used to prepare the financial statements. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare the financial
statements or to the basic financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures
of federal awards and certain state grants is fairly stated in all material respects, in relation to the basic financial
statements as a whole.
Other Reporting Required by Government Auditing Sløndørds
In accordance with Government Auditing Standards, we have also issued our report dated December 15,2014 on our
consideration of Conemaugh Township Area School District's internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standqrds in considering Conemaugh Township Area School District's internal control over financial
reporting and compliance.
(oU.*r^r¡
Q-€'tr.
s g¡.,rocro.Jrr
fotzHCPR &
Associates, P.C.
Johnstown, Pennsylvania
December 15,2014
4
Þ
C
Management's Discussion and Analysis
C
onemøugh T ownship Areø
S
cho
ol District
2013-2014
This Managemenfs Discussion and Analysis (MD & A) offers an overview of the Conemaugh Township
Area School Districfs (CTASD) financial performance during the fiscal year July 1, 2013-June 30,20L4. It
should be read in conjunction with the financial statements, which follow. Comparative data from fiscal
year 2012-2013 is required and is included in this report.
FIN,{NCIA¿ STATEMENTS
Financial Statements have been audited by Kotzan CPA & Associates, P.C. and prepared in accordance
with GASB Statement No. 34, presenting both entity-wide and fund-type reports using both the accrual
and modified accrual basis of accounting respectively.
GASB # 34 REPORTING
Every effort has been made to ensure this report is easy-to-read and understandable to all citizens of the
Conemaugh Township Area School District and other interested parties. Questions and comments
regarding the included information may be obtained either in person or by mail by contacting: Mrs. Gina
Rembold, Business Manager, 300 W. Campus Avenue, Davidsville, PA 15928; Phone (814) 479-7431 or
email regina.rembold@ctasd.org. The remainder of the report contains information included in the fiscal
year 2013-2014 Annual Financial Report (PDE form 2057) and local auditor's repott. Comparative data
for 2012-2013 vs.2013-2014 is included in the following report.
Government-wide Statements
The government-wide statements report information about the District as a whole using the accrual
method of accounting. Net assets include all of the districfs assets and liabilities. Current year revenues
and expenditures are included in the statement of activity regardless of when paid or received. This
approach allows school districts to account for assets and liabilities more like a "for-profl(' business
would, making comparisons easier and more consistent.
The financial well-being of the District can be more easily assessed using the net assets report or the
overall difference between assets and liabilities. The following reports only show the Districfs financial
stability and do not address the overall success or failure of the District. Determining if the District is
providing a quality education to its students while maintaining financial stability is much more difficult
and involves many non-financial factors not included in this analysis. It is important to keep in mind, as
these reports are reviewed, financial statements, although very important, are only one part of the overall
operation of the District.
The government-wide statements are divided into two categories:
l. Government Activities - Includes all basic activities, such as education,
2.
administration,
transportation, capital projects and athletics.
Business-Type Activities - Food Service Department. Fees and charges to staff and students help
support the cost of operation.
5
Manogemenl's Díscussíon and Anolysis (MD&A)
Fund Financial Statements
Fund financial statements provide information about the significant funds, not
the district as o whole
Gotsernmental Funds - Governmental funds encompass most of the Districf s activities. Government fund
statements present a detailed, short-term financial view of the District on a modified accrual basis.
Proprietary Funds - Proprietary funds are more like a business-type activity. The District Food Service
Fund is a proprietary fund in that money is collected through fees and charges and supports the expenses
of the fund.
Fiduciary Funds - Funds where the District is a custodian or trustee. The District cannot use these funds
for any operational expenditure. The Student Activities Fund and Scholarship Fund represent fiduciary
funds.
FINANCIAL HIGHLIGHTS
The Conemaugh Township Area School Districfs general fund posted revenues of 513,201,,661 and
expenditures of fi12,67'L,085. The difference resulted in a surplus of revenues over expenditures in the
amount of $530,576. Conemaugh Township Area School Districfs general fund maintains a healthy fund
balance of $5,518,699 at ]une 30,20't 4, $800,000 of which was assigned in an effort to offset the anticipated
PSERS rate increases. These amounts are reflected in the fund financial statements (modified accrual
basis).
Property taxes were increased 3.66 mills for the 2012-2013 fiscal year to fund the debt service payments
associated with the Elementary School renovation/ addition.
t};re 2012-2013 fiscal year the District issued the Series of 2012 General Obligation Bonds in the
amount of 58,225,000 to fund the Elementary School renovation. The balance outstanding at June 30,2014
was 57 ,675,000. During tl:re 2013-201.4 fiscal year the District issued the Series of 2014 General Obligation
Bonds in the amount of $4,095,000 to fund various capital improvements in the District and to refund the
Districfs 2006 lease agreement with the Bank of America. The balance outstanding at June 30,2014 was
During
$4,095,000.
6
Mønagement's Díscussíon ønd Anølysis (MD&A)
Entity-Wide Financial Analysis
Table 1 summarizes the assets, liabilities, and net position of the District at June 30,20'1.4, as compared to fune 30,2013.
Table L
Condensed Schedule of Net Position (Page EW-{EW-2)
Governmental Activities
2014
Assets
Current assets
Capital assets
Net Position
Invested in capital assets,
net of related debt
Total net position
* Restated
-
see
2013
$105,186
12,342,605 * 155,713
$
928,219,234
fi
25,575,174 9260,899
fi 26-t,075 fi29,490,133 fi
fi
g
1,877,02'1.
g
2,474,'1.47
g,ggL,536
1'1,,669,702
34,113
fi
6,997,986
fi
fi14,672,5\]..
g
7,622,851
6,596,640
14,219,491.
$
3L,505
$13,531,528
187,397 * 14,948,605
10,485
22,211.
fi
1,91'1.,134
g
g
97,153,699
fi
39,568
fi 187,397 *
40,982 *
$195,281
g 228,379
914,867,792
fi
32,696
Change
201}2014
13,306,247
12,530,002
25,836,249 $
2,643,984
2,494,632
8,903,747
1'1,,701,,207
g
',ß $155,713
*
73,678
913,612,341
913,il6,723 $11,355,683 $65,618
7,674,525
Unrestricted
2014
2013
13,232,569
1.4,792,892
Liabilities
Cur¡ent liabilities
Long-term liabilities
Total liabilities
2014
2013
Total School District
g
fi13,426,342
Total assets
Business-type Activities
7,7't4,093
11,388,379 fi2,223,962
7,910,249
6,637,622
$
1.4,447,870
$
419,922
Note 23 to the financial statements.
Current assets are largely comprised of cash and investments. Capital assets represent land, buildings, and equipment less accumulated
depreciation. Current liabilities primarily include accrued salaries and wages as well as the current portion of long-term debt. Long-term debt is
comprised of the compensated absences liability, the OPEB liability, and the Series 2012 and Series 2014 Bonds.
The most significant flucfuations reflected above are the increases in capital assets and long-term liabilities. The increase in capital assets reflects
the ongoing building renovations and additions. Liabilities increased as a result of debt service incurred for the Series 2014 bond issue.
7
Management's Díscussion and Analys¡s (MD&A)
Table 2 summarizes the revenues, expenses, and changes in net position of the District for the year ended June 30, 2014 compared to the year
ended June 30,2013.
Table 2 (REPÆRO-3A)
Changes in Net Position
GovernmentalActivities Business-typeActivities
2014
Program Revenues:
Charges for services
Operating grants and contributions
Capital grants and contributions
$
73,884
2073
$
2014
70,088
2013
Total School District
Variance
2014
2013-2014
g
2013
g
328,308
30't,617
2,868,664
0
0
50,991
0
3,746,092
6,798,044
0
0
3,704,290
0
6,868,30'1,
11.,955
18,605
11
27
11.,966
3,746,092
6,798,044
18,632
(41,,812)
0
3,524
8,373
0
0
3,524
8,373
4.849\
13,809,333
13,54'1,,239
2,505,919
2,343,029
9227,733
362,845
50,981
0
3,704,280
6,868,301
$
228,673
298,761.
$
2,671,,337
2,856
197,327
50,981
General Revenues:
Taxes levied
Grants and entitlements
Investment earnings
Other
Total Revenues
Program Expenses:
Instruction
Support services
Instructional student support
Administrative and f inancial
support services
Operation and maintenance
Pupil transportation
Student activities
Interest on long-term debt
Food service
Total Expenses
Increase (Decrease) in net position
13,218,7M 12,984,231,
7,599,550
552008
590,589
7,599,550
7,1,65,487
0
0
542,863
609,906
0
o
2,048,797
1,648,190
0
0
0
0
0
0
623,687
12,765,724
11,803,955
623,687
57't,42't
13,389,41'L
q__4qq&?q
g_J;t80,ú9
(14,413\
g 419,922 fi
'1,,19'1,,634
'L,054,006
714,754
411,050
726,498
39L,634
208,234
257,076
0
fl9lq2q)
8
g
70,257
(6,666)
268,094
434,063
7,1.65,487
542,863
609,906
0
2,048,797
'1,,648,190
400,607
0
0
0
0
57L,421.
'L,19L,634
1.,054,006
137,628
714,754
726,498
39L,634
208,234
(1'1.,744)
57't,,421.
52,266
411,050
257,076
623,687
(67,043)
19,416
48,842
'1,,074,035
12,375,376
L,L65,863
ç
(745,9411
Mønøgement's Díscussion and Analysis (MD&A)
The Change in Net Position across funds from 2012-2013 to 2013-201.4 was an increase of fi419,922.
of the governmental activities increased in 2013-2014 as a result of the tax increase. The
Districfs food service expenses increased 952,266 over prior year.
Revenues
Despite rising costs, the District continued to offer free breakfast to all students, grades K-12.
The previous table shows the cost of program services and the charges for services and grants offsetting
those services. The table below reflects the cost of program services and the net cost of those services
after taking into account the program revenues and unrestricted state entitlements.
Net Revenue/Expenses (Page EW-38)
Program Expenses
Total Cost
of Services
2014
Net Cost
Net Cost
of Services
Total Cost
of Services
of Services
2014
2013
2013
:
Instruction
g
support
Administration
Maintenance
Student activities
Community services
Interest and fiscal charges
Net program expenses
Instructional student
7,599,550
542,863
2,048,797
1.,19L,634
7't4,754
41't,050
fis,628,955
541,569
2,027,785
1,140,653
177,295
g
361,827
fis,39'1,771
609,906
609,906
1,,648,190
'1,554,009
1,,054,006
'L,054,006
726,498
39L,634
232,526
340,710
(324)
0
(120)
0
7,1.65,487
257,076
257,076
208,234
208,234
fi12,765,724
10,135,040
$4Éa¿gt
g,3go,g3g
Less: Unreshicted state entitlements
(6,868,301)
(6,798,044)
Total governmental activities
w,266,739
fi2,592,794
Business-type activities
Food service
:
g
623,687
$
33,109
g
571,421
g___!!,440
Total net cost of service increased from2012-2013 to 2013-20't4,largely due to personnel costs; salaries
and retirement contributions.
Business-Type Activities
Food service management-the cafeteria showed an increase in the net cost of service
compared to 2012-2013, reflecting the overall increase in food service expenses.
9
n
2013-201.4
Manøgemenf's Díscussìon ønd Anølysis (MD&A)
FTIND FINANCI,4.¿,4N,4L YSIS
General Fund Reuenues
The Conemaugh Township Area School District derived its revenue from three main sources; local effort,
state subsidy and reimbursements, and federal funding. State funding continued to be the largest
revenue source for Conemaugh Township Area School District in 2013-201.4. State subsidies and/or
reimbursements accounted for 68% of the total revenue received tn 2013-201.4 ($8,951,009); 30%
(94,015,594) was local efÍort, consisting largely of real estate tax collections; 2% (9235,058) represented the
federal share which was basically Title grants and Medical ACCESS reimbursements.
201.3-2014
Function/Description
6000-Local Revenues
7000-State Revenues
8000-Federal Revenues
9000-Other Revenues
Totals
Actual
Budgeted
$
3,836,038
8,924,647
284,819
$
Variance
4,015,594
g
8,951,,009
26,362
(49,761\
235,058
0
0
$ 13,045,504
g 13,201.,661
179,556
0
g
156,157
201}20L4 Differences from Budseted to Actual
Local
a
Increased EIT collections and other local revenues accounted
actual.
State
a
Small increases in state funding account for the modest increase.
Federal
a
Reduction in ACCESS and Title funding.
l0
for the increase from budget to
Management's DÍscussion and Analysís (MD&A)
General Fund Expenditares
CTASD expenditures during 2013-201,4 totaled 912,67L,085. A breakdown of expenditures is illustrated in
the table below.
Function/Description
Actual
Budgeted
fi
11O0-Rezular Education
1200-Special Education
5,76't,281
$
Variance
5,303,985
g
457,296
'L,640,289
1,,546,008
94,281
308,000
194,731,
113,269
300-Vocational Education
1400-Other Education
150O-Nonpublic School Program
2100-Pupil Services
2200-Media Services
1
67,608
59,017
6,500
13,1.66
42't,200
422,060
202,647
'1,67,376
8,591
(6,666)
(860)
35,27'1,
2300-Administration
945,273
944,751
522
2400-Health Services
266,141
256,929
9,2-1.2
2500-Business Office
331,,82't
360,492
(28,671\
1,205,699
1,1,65,890
39,809
767,700
678,803
308,324
403,012
11L,048
15,269
2600-Maintenance
2700-Transportation
2800/2900-IU Prosrams
3000-Extracurricular Activities
4000-Construction
5000-Financing
419,372
41,8,281
0
0
0
't,697,092
846,541
850,551
fi 14,458,904 g
Totals - rounded
201.3-2014 Differences
88,897
12,67'1.,085
g
-1.,787,819
from Budgeted to Actual
a
Overall savings in the 1100 category was largely realized due to a result of conservative spending
in the other purchased services and supply objects, lower than expected healthcare/salary
a
Savings in the 1300 category was primarily due to maintaining much lower than expected GICTC
rates and enrollment.
Savings in the 2600 category was largely due to lower than expected spending for utilities such as
natural gas and electricity and newly negotiated contracts.
The "5000" category was under budget as a result of lower than expected interfund transfers to
increases.
a
a
Capital Reserve.
General Fund Expenditure Comparative Data 2012-20L3 vs. 2013-2014
An illustrative comparative chart below shows the overall expenditures from 2012-2013 vs.2013-2014.
Fiscal Year
2012-2013
2013-201,4
Difference
Category-
Category- Category- Category
1000
2000
3000
$6,928,408
$3,851,L85
fi373,494
97,1'1.6,907
M,304,625
188,499
453,M0
g
g
l1
9403,012
29,518
g
Category-
4000
$o
$o
$o
5000
9L,099,086
g
u6,541
g (252,545)
Manøgement's Discussion ønd Anølysís (MD&A)
Data 2Ol3-2O]4
Fund Financials
The State recommends school districts maintain a General Fund "fund balance" of 8-12%, and has
enacted legislation to limit the abitity of districts to raise real estate tax rates when a district has a fund
balance over 8% (if budgeted expenditures exceed $19 million) or 12% (if budgeted expenditures are less
than $19 million).
CTASD's fund balance exceeded the State's recommendation and was more than enough to cover cash
flow issues throughout the year. The fund balance as of June 30,20-1,4 is higher than the previous year.
Overall, the District continues to maintain a fund balance higher than recommended by the State.
Controlled, further reduction of this fund balance to enhance the educational experience for the students
of Conemaugh Township Area School District would not put the District in any financial danger. It
should be noted, however, that reducing the fund balance also reduces the ability to earn interest on
those funds throughout the fiscal year. It is advisable to maintain a reasonable fund balance, while not
over-taxing the citizens of the District, and yet maintaining a balance between educational and financial
responsibilities. The District also has assigned $800,000 of the Fund Balance to be used for the anticipated
PSERS rate hikes in2014-2015 and beyond.
Capital Assets
The following table illustrates changes in capital assets, net of depreciation, by asset type.
Capital Assets - Net of Depreciation (EW-l.)
Governmental
Activities
Land
Site improvements
Buildings
Construction in progress
Equipment and furniturr
Total
fi
20't4
+o,seo
2,240,261"
11,,405,69'1,
'1.46,774
950,957
Business-type
Total
Percentage
Activities
School District
Change
2014
2013
20],4 2013
*
g
0
o fi 46,560 5 46,560
46,560
$
*
2,240,26'1.
2,383,090
0
2,383,090
0
*
4,'1,45,129
0 1'1,405,69L
4,'145,129
0
'146,774
4,663,334
o
0
4,663,334
'1.,106,670
'J,,104,492 * 155,713
*
1,291,889
187,397
2013
$
fi't4,790,243 fi 12,342,605 9155,713 9187,397 914,945,956
912.-9002
The increase in capital assets in fiscal year 2014 reflects the significant additions and renovations to the
Elementary School. The construction fund was nearly depleted during tllre 2013-2014 as construction at
the elementary was completed.
t2
2013-2014
0.0%
-6.0%
175.2%
-96.9%
-14.3%
1g.g%
Management's Discussion und Analysìs (MD&A)
Debt
The following table illustrates a condensed summary
of outstanding long-term debt, including
percentage change.
Outstanding Long-Term Debt
Total
School District
2013
fil't,770,000 $8.971,008
2014
Other general obligation debt
Total
wJz!,000
$8.92L008
Total
Percentage Change
2013-201,4
3L.27o
3L.2l'
Total debt includes funding the Elementary School renovations and additions as well as debt to fund a
High School renovation project and retire previous energy saving project debt.
Ãct7Ufuct"l. of 2006
The Board of Directors took no action on Act T2which signified that the District opted out of Act 72. Act
'T.,
of 2006, a revamped Act72, with many of the same provisions was approved by the State in june 2006.
Final Notes:
The Board and Administration of the Conemaugh Township Area School District encourages the citizens
and taxpayers of the District to review this document in conjunction with other financial resources that
are available, including the Pennsylvania Department of Education's website at www.pde.state.pa.us and
the CTASD website at www
orq. The Districfs website contains a wealth of information about the
District, its stafl students, Board, and financial status.
Lastþ when reviewing this data included in this report it is important to note that the financial
condition of the District while very important, is not the only indicator of a successful school dishict and
must be considered only as one piece of the complex picture that makes up the Conemaugh Township
Area School District.
t3
Basic Financial Statements
t4
Statement of Net Position
June 30, 2014
Governmental
Business-Type
Activities
Activities
Total
Assets
Current assets:
$
$
861,301
0
9,106,396
3,005,644
861,301
Intergovernmental receivables
308,132
7,336
315,468
Other receivables
77,795
50,000
143,500
1,252
30,172
0
19,047
80,172
143,500
13,426,342
105,186
13,531,528
46,560
14,596,909
146,774
2,649
0
155,713
0
0
Total noncurrent assets
14,792,892
155 713
14,948,605
Total
28,219,234
260,899
28,480,133
0
0
0
$ 28,219,234
q__æ9É92
s
$
Cash and equivalents
Investrnents
Taxes receivable
Inventories
Prepaid expenses
Total current
assets
Noncurrent assets:
Land
Depreciable capital assets, net
OPEB asset
assets
Deferred Outflows of Resources
Total assets and deferred outflows ofresources
9,039,970
3,005,644
$
66,426
0
46,560
14,752,622
146,',|74
2,649
$
28,480,133
Liabilities
Current liabilities:
Intergovernmental payables
Accounts payable
Accrued salaries and benefits
Payroll deductions and withholdings
Accrued interest payable
Current portion of long-term obligations
73,69s
428902
0
)s l4
$
934,557
16,195
0
934,557
16,195
73,695
431,416
0
22,393
0
22,383
40r,289
600
401,889
0
30,999
30,999
1,877,021
34,113
1,911,134
I1,300,668
369,034
0
31,505
I1,300,668
Total noncurrent liabilities
11,669,702
31,505
11,701,207
Total liabilities
13,546,723
65,618
13,612,341
0
0
0
Invested in capital assets, net ofdebt
Restricted for capital projects
6,997,986
155,713
7,153,699
1,782,167
0
Unrestricted
5,892 ,358
39,568
1,782,167
5,931,926
14,672,511
195,281
14,867,792
Unearned revenues
Total current liabilities
Noncurrent liabilities :
Bonds payable, net
Long-term portion of compensated absences
Deferred Inflows of Resources
400,539
Net Position
Total net position
Total liabilities, deferred inflows of resources
s
and net position
See accompanying notes
28,219,234
$
to the basic financial statements.
l5
260,899
$
28,480,133
Statement of Activities
For the Year Ended June 300 2014
Program Revenues
Charges for
Services
Expenses
Governmental Activities:
Instruction
Instructional student support
Administration and fi nancial
support services
Operations and maintenance
ofplant services
$
7,599,550
542,863
s
1,931,752
Activities
Activities
$ (5,628,955)
Total
0
$ (5,628,955)
0
(54r,569)
0
1,294
2,048,797
0
21,012
0
(2,027,785)
0
(2,027,785)
I,tgt,634
0
0
714,754
0
34,921
120
(1,140,653)
(177,295)
(361,827)
0
257,076
0
0
0
50,98 I
0
0
0
0
0
0
0
0
0
(1,140,653)
(177,295)
4l I ,050
537,459
14,302
12,765,724
73,884
2,505,819
50,981
(10,135,040)
623,687
227,733
362.84s
0
$ 13.389,41l
q_!9_1,612
Business-Type Activities:
Food service
Total primary government
38,843
Capital Grants
and Contributions
0
0
Student activities
Communify services
Interest on long-term debt
Total governmental activities
$
Operating Grants
and Contributions
Net (Expenses) Revenues and
Chanses in Net Position
Governmental
Business-Type
$
2,868,664
$
$
50.981
General Revenues:
Taxes levied
Grants, subsidies and contributions, not restricted
Investment earnings
(541,569)
r20
(2s7.076\
0
(10,135,040)
$
(36r,827)
120
(2s7.076\
0
(10,135,040)
(33,109)
(33,109)
(33,109)
110.168.149)
3,704,280
0
3,704,280
6,868,301
I 1,955
3,524
0
ll
6,868,301
11,966
3,524
Total general revenues
10.588.060
ll
Change in net position
453,020
Miscellaneous
Net position, beginning of year, restated
Net position, end of year
See accompanying notes to the basic financial statements
t6
0
(33,098)
14,2r9,49r
228,379
814.672.51t
$__ur2!!
10.588,07r
419,922
14"447
"870
s14,867,792
Balance Sheet
Governmental Funds
June 30, 2014
General
Fund
Major Fund
Total
Capital
Projects Fund
Governmental
$
$
Funds
Assets
s
Cash and cash equivalents
Investments
Taxes receivable
Due from other governments
Other receivables
Inventories
Prepaid expenditures
Total
assets
5,643,262
600,000
861,301
s
9,039,970
3,005,644
861,301
308,132
308,132
0
17,795
50,000
143,500
0
17,795
0
50,000
0
143 500
7,623,990
5,802,352
13,426,342
0
0
0
7,623,990
g___lw;2
3,396,708
2,405,644
0
g
13,426,342
Liabilities
Due to other governments
Accounts payable
Accrued salaries and benefits
Payroll deductions and withholding
$
Total liabilities
46,774
73,695
428,902
934,557
16,195
0
0
934,557
16,195
1,306,575
146,774
1,453,349
798 716
0
798,716
798 7t6
0
798,',|16
73,695
282,128
$
0
$
Delinquent taxes receivable
Total deferred inflows of resources
Fund Balance
Nonspendable
Restricted
Assigned
Unassigned
Total fund balance
Total liabilities, deferred inflows of resources,
s
and fund balance
193,500
0
193,500
0
5 ,655,578
5,655,578
800,000
4,525 .r99
0
800,000
0
4,525,199
5,518,699
5,655,578
tt,174,277
7,623
,990$5,802,352$t3,426,342
See accompanying notes to the basic financial statements.
t7
Reconciliation of the Governmental Funds Balance Sheet
To the Statement of Net Position
June 300 2014
Total fund balance
-
Amounts reported
governmental funds
for
$ 11,174,277
governmental activÍties
in
the
statement of net position are different because:
Capital assets used in governmental activities are not financial
resources and therefore, are not reported as assets in
governmental funds. The cost of assets is$27,992,281 and the
accumulated depreciation is
$I
14,790,243
3,202,038.
Property taxes receivable will be collected in the future, but
are not available soon enough to pay for the current period's
expenditures and therefore, are recorded as deferred inflows of
resources in the funds.
798,716
Long-term liabilities are not due and payable in the current
period and therefore, are not reported as liabilities in the
funds. Long-term liabilities at year end consist of:
Bonds payable
$(1t,77o,ooo)
Unamortized bond discounts
Accrued interest payable
Compensated absences
OPEB asset
104,332
(22,383)
(405,323)
2.649
(,12.090.72s)
Total net position of governmental activities
s_!4.fr2.51L
l8
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30,2014
General
Fund
Revenues
Local sources
$
4,015,594
Major Fund
Total
Capital
Projects Fund
Governmental
3,616
$
Federal sources
Total revenues
$
4,019,210
235,058
0
0
8,951,009
235,058
13,201,661
3,616
13,205,277
7,116,907
4,304,625
403,012
0
71,342
0
0
596,541
3,026,069
983,852
7,116,90'l
4,375,967
403,012
3,026,069
l,5go,3g3
12,421,085
4,08 1,262
16,502,347
780,576
(4,077,646)
(3,297,070)
0
0
4,095,000
(13,021)
4,095,000
(13,021)
8,951,009
State sources
Funds
Expenditures
Instruction
Support services
Non-instructional services
Capital outlay
Debt service (principal and interest)
Total expenditures
Excess ofrevenues over (under) expenditures
Other linancing sources (uses)
Bond proceeds
Bond discount
Interfund transfers
Total other financing sources (uses)
Net change in fund balance
Fund balance, beginning ofyear
Fund balance, end ofyear
See
(250,000)
250,000
0
(250,000)
4,331,979
4,081,979
530,576
254,333
784,909
4,9 88,123
5,401,245
10,389,368
$ 5,518,699 $ 5,655,578 S 11,174,277
accompanying notes to the basic financial statements
t9
Reconciliario n or th e r,,t
:iäi :iïTåi:::iï:ffi i::i Tiiä:"*"s in
F un
d
B
arances
To the Statement of Activities
For the Year Ended June 30, 2014
Total net change in fund balance
Amounts reported
for
-
$
governmental funds
governmental activities
in
784,909
the
statement of activities are different because:
Governmental funds report capital outlays as expenditures.
However, in the statement of activities, the cost of those assets
is allocated over their estimated useful lives as depreciation
expense. This is the amount by which capital outlays
exceeded depreciation expense in the current period.
Capital outlay
Depreciation expense
93,078,349
630.7tt)
2,447,639
Because some property taxes will not be collected for several
months after the District's year end, they are not considered as
"available" revenues in the governmental funds. Deferred
inflows of resources from tax revenues increased by this
amount this year.
13,467
Interest on long-term debt is recognized in the governmental
funds when it is due. In the statement of activities, interest
expense is recognized as interest accrues. The liability for
accrued interest expense decreased by this amount this year.
27,309
In the
governmental funds, compensated absences
measured by the amounts used. The statement
measures
by the
are
of activities
amounts earned. The liability for
compensated absences increased by this amount this year.
(33, I s9)
Post-employment benefits are recognized as expenditures in
the governmental funds when they are paid. In the statement
of
activities, post-employment benefits are recognized as
expenses when incurred. This amount represents the
2,783
difference.
20
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances
To the Statement of Activities
The proceeds and principal payments on long-term debt
provide and consume current financial resources of
governmental funds, respectively. However, they respectively
increase or reduce long-term liabilities on the statement of net
position. Further, the effect of bond discounts are reported in
the funds in the year of issue but are deferred and amortized in
the statement of activities. The effect is shown below:
Proceeds on 2014 Bond
Discount on 2014 Bond
Bond principal payments
$(4,095,000)
13,021
240,000
Energy Saver Project principal pa¡rrnents
Amortization of bond discount
1,056,009
ç.es6)
Change in net position of governmental activities
(2.789.927\
$__453-0æ
2t
Statement of Net Position
Proprietary Fund
June 30, 2014
Food Service
Assets
Current assets:
Intergovernmental
rec
$
eivables
66,426
'7,336
1,252
30,172
Other receivables
Inventory
105, I 86
Total current assets
Noncurrent assets:
Furniture and equipment, net
155,7t3
Total noncr¡rrent assets
155,713
Total assets
260,899
0
$
260,899
Liabilities
Current liabilities:
Accounts payable
$
Unearned revenue
2,514
30,999
600
Current portion of compensated absences
34 113
Total current liabilities
Noncurrent liabilities :
Long-term portion of compensated absences
31,505
Total noncurrent liabilities
3l.505
Total liabilities
65.618
0
Net Position
155,713
39,568
Invested in capital assets
Unrestricted
195,281
Total net position
Total liabilities, deferred inflows of resources and net position
22
$
260,899
Statement of Revenues, Expenses and Changes in Fund Net Position
Proprietary Fund
Food Service
Operating revenues
s
Food service revenue
227,733
227,733
Total operating revenues
Operating expenses
t93,620
Salaries
Employee benefits
Purchased property services
Other purchased services
Supplies
81,606
5,049
1,150
310,278
31,684
Depreciation
300
Dues and fees
Total operating expenses
623,687
Operating income (loss)
(395,954)
Nonoperating revenues (expenses)
ll
Eamings on investrnents
48,417
State sources
314,428
Federal sources
Total nonoperating revenues (expenses)
362,856
Change in net position
(33,098)
Total net position, beginning ofyear, restated
228,379
$
Total net position, end ofyear
23
195,281
Statement of Cash Flows
Proprietary Fund
Food Service
Cash flows from operating activities
fi
Cash payments to employees for services
228,559
(184,847)
Cash payments to suppliers for goods and services
(4t7,597)
Cash received from users
(373,885)
Net cash provided by (used for) operating activities
Cash flows from non-capital financing activities
47,799
328,658
State sources
Federal sources
376,457
Net cash provided by (used for) non-capital financing activities
Cash flows from investing activities
Eamings on investrnents
ll
ll
Net cash provided by (used for) investing activities
2,583
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning
Cash and cash equivalents, end
63,843
ofyear
g
ofyear
66,426
Reconciliation of operating income (loss) to net cash provided by (used
for) operating activities:
$
Operating income (loss)
(39s,9s4)
Adjustments to reconcile operating income (loss) to net cash provided by
(used for):
31,684
Depreciation
(Increase) decrease in
(Increase) decrease in
Increase (decrease) in
Increase (decrease) in
accounts receivable
139
(21,727)
2,514
inventories
accounts payable
accrued salaries/benefits
8,7',72
687
Increase (decrease) in unearned revenue
22,069
Total adjustrnents
Net cash provided by (used for) operating activities
See
accompanying notes to the basic financial statements.
24
$
(373,885)
Statement of Fiduciary Net Position
Fiduciary Funds
June 30,2014
Agency
Fund
Assets
$ 30,978
30,978
Total assets
0
Total assets and deferred outflows of resowces
$_3082q
Liabilities
$ 30,978
Due to students
30,978
Total liabilities
0
Net Position
0
Toøl liabilities, deferred inflows of resources and net position
See
accompanying notes to the basic financial statements.
25
$ 30,978
Notes to Financial Statements
June 30, 2014
1.
Description of School District and Reporting Entity
The Conemaugh Township Area School District is a Local Education Agency of the third class, govemed by a
nine-member publicly elected board, located in the Commonwealth of Pennsylvania. The District has
approximately 1,020 enrolled students and operates two school buildings, including an elementary school
(grades K-5) and a middle/senior high school (grades 6-12). The District also participates in a local area
vocationaVtechnical school with various other districts
A reporting entity is comprised of the primary government, component units and other organizations that are
included to ensure that the basic financial statements of the School District are not misleading. The primary
government consists of all funds, departments, boards and agencies that are not legally separate from the School
District. For Conemaugh Township Area School District, this includes general operations, food service, and
student related activities of the School District,
Component units are legally separate organizations for which the School District is financially accountable or
other organizations whose nature and significant relationship with the School District are such that exclusion
would cause the School District's financial statements to be misleading. Financial account¿bility is defined as
the appointment of a voting majority of the component unit's board, and (1) either the School District's ability
to impose its will on the organization; or (2) there is potential for the organization to provide a financial benefit
to or impose a financial burden on the School District. The School District has no component units.
2.
Summary of Significant Accounting Policies
The financial statements of the School District have been prepared in conformity with generally accepted
accounting principles (GAAP) as applied to local govemmental units. The Governmental Accounting
Standards Board (GASB) is the accepted standard-setting body for establishing goverrìmental accounting and
financial principles. The more significant of these accounting policies are described below.
A.
Basis of Presentation
The School District's basic financial statements consist of government-wide statements, including
a
statement of net position and a statement of activities, and fund financial statements which provide a more
detailed level of financial information.
Government-wide Financial Statements
The statement of net position and the statement of activities display information about the School District
as a whole. These statements include the financial activitics of the primary government, except for
fiduciary funds.
26
June 30, 2014
The statement of net position presents the financial condition of the governmental and business-type
activities of the School District at year end. The statement of activities presents a comparison between
direct expenses and program revenues for each program or function ofthe School District's governmental
and business-type activities. Direct expenses are those that are specifically associated with a service,
program or department and therefore clearly identifiable to a particular function. Program revenues
include charges paid by the recipient of goods and services offered by the program, and grants and
contributions that are restricted to meeting the operational or capital requirements of a particular program.
Revenues which are not classified as program revenues are presented as general revenues of the School
District. The comparison of direct expenses with program revenues identifies the extent to which each
business segment or governmental function is self-financing or draws from the general revenues of the
School District.
Fund financial statements are also provided in the report for all governmental funds, proprietary funds, and
the fiduciary funds of the School District. Major individual govemmental funds and major individual
enterprise funds are reported as separate columns in the fund statements. Non-major funds are aggregated
and presented in a single column. Fiduciary funds are reported by fund type.
B.
Fund Accounting
The School District uses funds to maintain its financial record during the year. A fund is defined as a fiscal
and accounting entity with a self balancing set of accounts. There are three categories of funds:
governmental, proprietary and fiduciary.
Governmental Funds
Governmental funds are those through which most governmental functions typically are financed.
Governmental fund reporting focuses on the sources, uses and balances of current financial resources.
Expendable assets are assigned to the various governmental funds according to the purposes for which they
may or must be used. Current liabilities are assigned to the fund from which they will be paid. The
difference between goverffnental fund assets and liabilities is reported as fund balance. The following are
the School District's major governmental funds:
General Fund - The general fund is the operating fund of the School District and is used to account for all
financial resources except those required to be accounted for in another fund.
Capital Projects Fund - The capital projects fund is used to account for and report financial resources that
are restricted to be used for the acquisition, construction, renovation, and deferred maintenance of major
capital facilities or equipment, and for debt service.
Prog"ietary Funds
Proprietary funds focus on the determination of net position, changes in net position and cash flows and are
classified as either internal service or enterprise funds. Internal service funds account for the financing of
services provided by one department or agency to other departments or agencies of the School District.
There are no internal service funds. Enterprise funds may be used to account for any activity for which a
fee is charged to external users for goods and services. The following is the School District's major
enterprise fund:
27
June 30, 2014
Food Service Fund - This fund accounts for the financial transactions related to the food service operation
of the School District.
Fiduciar.v Fund
Fiduciary fund reporting focuses on net position and changes in net position. The fiduciary fund category
is split into four classifications: pension trust funds, investment trust funds, private-purpose trust funds and
agency funds. Trust funds are used to account for assets held by the School District under a trust
agreement for individuals, private organizations, or other governments and are therefore not available to
support the School District's own programs. The School District has no private purpose trust funds. The
agency fund is custodial in nature (assets equal liabilities) and does not involve measurement of results of
operations. The School District's agency fund accounts for those student activity progralns which have
student participation in the activity and have students involved in the management of the program.
C.
Measurement Focus
Government-wide Financial Statements
Government-wide financial statements are prepared using the economic resourccs measurement focus. All
assets, deferred outflows of resources, liabilities and deferred inflows of resources associated with the
operation of the School District are included on the statement of net position.
Fund financial statements are accounted for using a flow of current financial resources measurement focus.
With this measurement focus, only current assets and current liabilities generally are included on the
balance sheet. The statement of revenues, expenditures and changes in fund balances reports on the
sources (i.e. revenues and other financing sources) and uses (i.e. expenditures and other financing uses) of
current financial resor¡rces. This approach differs from the manner in which the governmental activities of
the government-wide financial statements are prepared. Governmental fund financial statements therefore
include a reconciliation with brief explanations to better identifu the relationship between the governmentwide statements and the statements for govemmental funds.
Like the government-wide statements, the proprietary fund is accounted for on a flow of economic
resources measurement focus. All assets, deferred outflows of resources, liabilities and deferred inflows of
resources associated with the operation of these funds are included on the statement of net position. The
statement of changes in fund net position presents increases (i.e. revenues) and decreases (i.e. expenses) in
net position. The statement of cash flows provides information about how the School District finances and
meets the cash flow needs of its proprietary activities.
Proprietary Fund types distinguish operating revenues and expenses from non-operating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary fund's principal ongoing operation. The principal operating revenues of the
Food Service fund are charges for sales and services. Operating expenses for Enterprise Funds include the
cost of sales and services and administrative expenses. All revenues and expenses not meeting this
definition are reported as non-operating revenues and expenses.
Fiduciary funds are reported using the economic resources measurement focus.
28
June 30, 2014
D.
Basis of Accounting
Basis ofaccounting determines when transactions are recorded in the financial records and reported on the
financial statements. Government-wide financial statements are prepared using the accrual basis of
accounting. Governmental funds use the modified accrual basis of accounting. Proprietary and fiduciary
funds also use the accrual basis of accounting. Differences in the accrual and the modified accrual basis of
accounting arise in the recognition ofrevenue, the recording ofunearned revenue and deferred inflows and
outflows of resources, and in the presentation of expenses versus expenditures. Unearned revenues are
addressed in Note 2L, and deferred inflows/outflows of resources in Note 2M.
Revenues - Exchange and Non-Exchange Transactions
Revenue resulting from exchange transactions, in which each party gives and receives essentially equal
value, is recorded on the acçrual basis when the exchange takes place. On a modified accrual basis,
revenue is recorded in the fiscal year in which the resources are measurable and become available.
Available means that the resources will be collected within the current fiscal year or are expected to be
collected soon enough thereafter to be used to pay liabilities of the current fiscal year. For the School
District, available means expected to be received within sixty days of fiscal year-end.
Non-exchange transactions, in which the School District receives value without directly giving equal value
in retum, include income taxes, property taxes, grants, entitlements and donations. Revenue from property
taxes is recognized in the fiscal year for which the taxes are levied (see Note 5). Revenue from grants,
entitlements and donations is recognized in the fiscal year in which all eligibility requirements have been
satisfied. Eligibility requirements include timing requirements, which specifu the year when the resources
are required to be used or the year when use is first permitted, matching requirements, in which the School
District must provide local resources to be used for a specified purpose, and expenditure requirements, in
which the resources are provided to the School District on a reimbursement basis. On a modified accrual
basis, revenue from non-exchange transactions must also be available before it can be recognized.
Under the modified accrual basis, the following revenue sources are considered to be both measurable and
available atyear end: property taxes available as an advance, interest, tuition, grants, fees and rentals.
Expenses/Expenditures
On the accrual basis of accounting, exp€nses are recognized at the time they are incurred.
The measurement focus
of
governmental fund accounting
is on decreases in net financial resources
(expenditures) rather than expenses. Expenditures are generally recognized in the accounting period in
which the related fund liability is incurred, if measurable. Allocations of cost, such as depreciation and
amofüzation, are not recognized in governmental funds.
E.
Budgetary Data
An operating budget is adopted each year for the General Fund on a modified accrual basis of accounting
The Pennsylvania School Code dictates specific procedures relative to adoption of the School District's
budget and reporting of its financial statements, specifically:
The School District, before levyrng annual school taxes, is required to prepare an operating budget for the
succeeding fiscal year.
29
June 30, 2014
The School District is required to adopt a proposed budget at least thirty (30) days prior to adoption ofthe
annual budget. The proposed budget shall be printed or otherwise made available for public inspection to
all persons and shall be made available for duplication to any person, on request, at least twenty (20) days
prior to the date set for the adoption of the budget. Final action shall not be taken on the proposed budget
until after ten (10) days ofpublic notice.
The Board of Directors may make transfers of funds appropriated to any particular item of expenditure by
legislative action. An affirmative vote of two{hirds of all members of the board is required. The amounts
reported as the original budgeted amounts in the budgetary statements reflect the amounts in the certificate
when the original appropriations were adopted. The amounts reported as the final budgeted amounts in the
budgetary statements reflect the amounts in the final amended certificate issued during fiscal year 2014.
Fund balances in Budgetary Funds may be appropriated based on resolutions passed by the Board of
Education, which authorized the School District to make expenditures. Appropriations lapse at the end of
the fiscal period. In order to preserve a portion of an appropriation for which an expenditure has been
committed by a purchase order contract, or other form of commitment, an encumbrance is recorded.
Included in the General Fund budget are program budgets as prescribed by the State and Federal agencies
funding the program. These budgets are approved on a program by program basis by the State or Federal
funding agency.
An Enterprise fund budget is not
adopted; however,
a formal budget is prepared and
approved by
management and expenditures are controlled on the basis of this budget.
F.
Prepaid Items
Payments made to vendors for services that will benefit periods beyond June 30, 2014, are recorded as
prepaid items using the consumption method. A current asset for the prepaid amount is recorded at the
time of the purchase and an expenditure/expense is reported in the year in which serviçes are consumed.
G.
Inventory
On government-wide financial statements inventories are presented at the lower cost or market on a first-in,
frrst-out basis and are expensed when used.
Inventories in governmental funds are stated at cost by the first-in, first-out method. The purchase method
is used to account for inventories. Under the purchase method, inventories are recorded as expenditures
when purchased; however, an estimated value of inventories ($50,000) is reported as an asset in the
General Fund. The inventories in the General Fund are equally offset by nonspendable fund balance which
indicates they do not constitute "available spendable resources" even though they are a component ofnet
current assets. The General Fund is the only governmental fund that has material inventory balances as of
Iune30,2014.
as of June 30, 2014. The
inventory consisted of government donated commodities which were valued at estimated fair market value,
and purchased commodities and supplies, both valued at cost using the first-in, first-out (FIFO) method.
Any unused commodities donated by the federal government at June 30,2014 are reported as unearned
A physical inventory of the Food Service Fund food and supplies was taken
revenue.
30
June 30' 2014
H.
Capital Assets
General capital assets result from expenditures in the governmental funds. These assets are reported in the
goveÍunental activities column of the govemment-wide statement of net position but are not reported in the
fund financial statements. Capital assets used by the proprietary fund are reported in both the business-type
activities column on the government-wide statement of net position and in the fund financial statements.
All
capital assets are capitalized at cost (or estimated historical cost) and updated for additions and
retirements during the year. Donated fixed assets are recorded at their fair market values as of the date
received. The School District maintains a capitalizaÍion threshold of fifteen hundred dollars ($ 1,500). The
School District does not possess any infrastructure. Improvements are capitalized; the costs of normal
maintenance and repairs that do not add to the value of the asset or materially extend an asset's life are not
capitalized.
All reported capital
assets, except for land and construction in progress, are depreciated. Improvements are
depreciated over the remaining useful lives of the related capital assets. Depreciation is computed using the
straight-line method over the following useful lives:
Estimated Lives
ôn
Buildings and Improvements
Furniture and Equipment
Site Improvements
I.
15 - 40 years
5 - 20 years
15 - 30 years
Original Issue Discounts
Bond discounts are reported as direct adjustments to the face amount of the bond and are deferred and
amortized over the life of the bond using the straight-line method of amortization.
J.
Receivables and Payables
Transactions between funds that are representative of lending/borrowing arrangements outstanding at the
end of the hscal year are referred to as either "due to/from other funds" (i.e. the current portion of interfund
loans) or "advances to/from other funds" (i.e. the non-current portion of interfund loans). Any residual
balances outstanding between the governmental activities and business-type activities are reported in the
government-wide financial statements as "internal balances." In governmental fund financial statements,
advances between funds are offset by an amount reported as nonspendable fund balance to indicate that
they are not available for appropriation and are not expendable available financial resources.
All receivables
are determined to be collectible. and no allowance has been established.
Receivables from and payables
to extemal parties are reported
separately and are not offset in the
of the government-wide financial
proprietary fund financial statements and business-type activities
statements, unless a right of offset exists.
K.
Accrued Liabilities and Long-term Obligations
All payables, accrued liabilities and long-term obligations are reported in the govemment-wide financial
statements, and all payables, accrued liabilities and long-term obligations payable from proprietary funds
are reported on the proprietary fund financial statements.
3l
Notes to tr'inancial Statements
June 30, 2014
In general, governmental fund payables and accrued liabilities that, once incurred, are paid in a timely
manner and in full from current financial resources, are reported as obligations of the funds. However,
claims and judgments, compensated absences, special termination benefits and contractually required
pension contributions that will be paid from governmental funds are reported as a liability in the fund
financial statements only to the extent that they are due for payment during the current year. Bonds are
recognized as a liability on the fund financial statements when due.
L.
UnearnedRevenues
The District reports uneamed revenue on its government-wide and fund financial statements. Unearned
revenues arise when potential revenue does not meet both the "measurable" and "available" criteria for
recognition in the current period (fund financial statements). Unearned revenues also arise when resources
are unearned by the District and received before it has a legal claim to them, as when grant monies are
received prior to the incurrence of qualifuing expenditures (fund financial statements and government-wide
financial statements). In subsequent periods, when both rovenue recognition criteria are met, or when the
District has a legal claim to the resources, the liability for unearned revenue is removed from the applicable
financial statement and revenue is recognized.
M.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position reports a separate section for deferred outflows of
resources. This separate financial statement element, deferred outflows of resources, represents a
consumption of net position or fund balance that applies to a future period(s) and thus, will not be
recognized as an outflow of resources (expense/expenditure) until then. The District currently reports no
deferred outfl ows of resources.
In addition to liabilities, the statement of financial position reports a separate section for deferred inflows
of
resources. This separate financial statement element, deferred inflows of resources, represents an
acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as
an inflow of resources (revenue) until that time. The District has one item, which arises only under a
modified accrual basis of accounting, that qualifies for reporting in this category. Accordingly, unavailable
revenue from delinquent taxes receivable of$798,716 is reported as a deferred inflow ofresources on the
governmental funds balance sheet only.
N.
Fund Balance Classification
GASB Statement No. 54, "Fund Bqlance Reporting and Governmental Fund Type Definitions," provides
more clearly defined fund balance categories to make the nature and extent of the constraints placed on a
government's fund balances more transparent. The following classifications describe the relative strength
of the spending constraints:
a
Nonspendable Fund Balance - amounts that are not in nonspendable form (such as inventory or
prepaid items) or are legally or contractually required to be maint¿ined intact.
Restricted Fund Balance - amounts constrained to specific purposes by their providers (such as
grantors, bondholders, and higher levels ofgovernment), through constitutional provisions, or by
enabling legislation.
32
June 30, 2014
a
Committed Fund Balance - amounts constrained to specific purposes by the District itself, using
its highest level of decision-making authority (i.e., School Board). To be reported as committed,
amounts cannot be used for any other purpose unless the District takes the same highest level
action to remove or change the constraint.
a
Assigned Fund Balance - amounts the District intends to use for a specific purpose. Intent can be
expressed by the School Board or by an official or body to which the School Board delegates the
authority.
a
Unassigned Fund Balance - amounts that are available for any purpose. Positive amounts are
reported only in the general fund.
As of June 30,2014, fund balance components, other than unassigned, consist of the following:
Nonspendable
General Fund:
Inventory
50,000
143,500
$
Prepaid items
Future retirement costs
Capital Projects Fund
Total
$
Restricted
Assigned
So
$0
0
0
0
800,000
0
5,655,578
0
193,500
$ 5,65s,578
0
s
800,000
The School Board establishes (and modifies or rescinds) fund balance commitments by resolution of the
board. A fund balance commitment is further indicated in the budget document as a commitment of thc
fund. Assigned fund balance may be established by the Business Manager and/or Superintendent, as
delegated by the School Board.
The District would typically use Restricted fund balances first, followed by Committed resources, and then
Assigned resources, as appropriate opportunities arise, but reserves the right
Unassigned resor¡rces first to defer the use of these other classified funds.
O.
to
selectively
spend
Net Position
Net position represents the difference between assets and dsferred outflows of resources, and liabilities and
deferred inflows ofresources. Net position invested in capital assets, net ofrelated debt consists ofcapital
assets, net ofaccumulated depreciation, reduced by the outstanding balances ofany borrowings used for the
acquisition, construction or improvement of those assets. Net position is reported as restricted when there
are limitations imposed on its use either through the enabling legislation adopted by the School District or
through external restrictions imposed by creditors, grantors or laws or regulations of other governments.
When both restricted and unrestricted resources are available for use,
restricted resources first, then unrestricted resources as they are needed.
it is the District's
policy to
use
The government-wide statement of net position reports 51,782,167 of restricted net position, which is
restricted by enabling legislation for capital projects.
JJ
June 30,2014
P. Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results may differ from those
estimates.
Q.
PensÍon Plan
Substantially all fulI-time and part-time employees of the District participate in a cost-sharing multiple
employer defined benefit pension plan. GASB Statement No. 27, Accounting þr Pensions by Støte and
Local Governmental Employers, requires an employer that participates in such a plan to recognize annual
pension expenditures or expenses equal to its contractually required contributions, subject to the modified
accrual basis of accounting in governmental funds. (That is, if contributions from governmental funds are
required but not made, the difference would not be reported as an expenditure but as a long-term liability if
not payable with expendable, available financial resources.) The District made all required contributions
for the year ended June 30, 2014, and has recognized them as expenditures and expenses in the
governmental and proprietary funds, respectively.
3.
Cash and Cash Equivalents and Investments
Under Section 440.1 of the Public School Code
of
1949, as amended, the District is permitted to invest its
monies as follows:
Obligations of (a) the United States of America or any of its agencies or instrumentalities backed
States of America, (b) the Commonwealth of
Permsylvania or any of its agencies or instrumentalities backed by the full faith and credit of the
Commonwealth, or (c) any political subdivision of the Commonwealth of Pennsylvania or any of
its agencies or instrumentalities backed by the full faith and credit of the political subdivision.
by the full faith and credit of the Unitsd
Deposits in savings or time deposits or share accounts of institutions insured by the Federal
Deposit Insurance Corporation to the extent that such accounts are so insured and, for any
amounts above the insured maximum, provided that approved collateral as provided by law is
pledged by the depository.
The deposit and investment policy of the school district adheres to state statutes and prudent business practice.
Cash equivalents are defined as short-term, highly liquid investments that are readily convertible to known
amounts of cash and include investments with original maturities of three months or less. Cash and cash
equivalents consist of demand deposits at local financial institutions, money market mutual fund investments
and certificates
of
deposit with Pennsylvania Local GoveÍrment Investment Trust (PLGIT) and the
Pennsylvania School District Liquid Asset Fund (PSDLAF), and cash on hand of $200. The market values of
deposits are equal to the cost of the deposits. The investments are stated at cost including accrued interest
which approximates market value.
34
June 30, 2014
The District invests in the Pennsylvania School District Liquid Asset Fund (PSDLAF) and the Pennsylvania
Local Government Investment Trust (PLGIT) as authorized by the Board. PSDLAF was established to enable
school districts to pool funds for investment in instruments authorized by Section 440.1 of the Pennsylvania
School Code of 1949, as amended. PLGIT insures that it will not place deposits with any single issuing
institution if the largest participant's pro rata share of such deposits exceeds insurance limits unless such
deposits are collateralized as prescribed by Act 72 of the Commonwealth of Pennsylvania. These funds have
the characteristics of open-end mutual funds and are not subject to credit risk classification.
The District's investments include multþle long-term certificates of deposit with PSDLAF and PLGIT
Cash
Custodial Credit Risk
-
Deposits
Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not be returned to
it. The District does not have a policy for custodial credit risk, however the District's deposits in excess of the
FDIC limit are collateralized in accordance with the Pennsylvania Security for Public Deposit Act. As of June
30,2014, S9,854,765 of the District's bankbalance of $10,377,538 was exposed to custodial risk as:
Uninsured and uncollateralized
Collateralized with securities held by the pledging financial institution
Uninsured and collateral held by the pledging bank's trust department
not in the District's name
Total
0
$
0
9.854.765
$_9.854Jé5
Reconciliation to Financial Statements
$
Uninsured amount above
Plus: Insured amount
Less: Outstanding checks
Carrying amount - bank balances
Plus: Petty cash
Pooled cash equivalents
Less: Ccrtificates of deposit considered investments
Total cash per financial statements
9,854,765
522,773
1170.850)
10,206,688
200
1,936,130
(3.005.644)
$_9-131Å14
Investments
As of June 30,2014, the District had the following investments:
Investment
Certificates of Deposit
Maturity
Fair Value
4-12 months
$3,005,644
N/A
N/A
PA Local Government Investment Trust
PA School District Liquid Asset Fund
Total
1,7
63,819
t72"3tl
$4p41J14
35
June 300 2014
Interest Rate Risk
The District does not have a formal investment policy that limits inveshnent maturities as a means of managing
its exposure to fair value losses arising from increasing interest rates.
Credit Risk
The District has no investment policy that would limit its investment choices to certain credit ratings. As
June 30,
20l4,the District's investments were rated
of
as:
Standard & Poor's
AJqAm
AJqAm
Investment
PA Local Government Trust
PA School District Liquid Asset Fund
Concentration of Credit Risk
The District places no limit on the amount the District may invest in any one issuer
Custodial Credit Risk
For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the District
will not be able to recover the value of its investments or collateral security that are in possession of an outside
party. The District has no investment subject to custodial credit risk.
Total investments above
Less: Deposits in investment pool considered cash equivalents
Total investments per financial statements
4.
g 4,941,774
0.936.130)
$l-005,644
Real Estate Taxes
Real estate taxes for the School District are collected from the Borough of Benson and the Townships of
Conemaugh and West Paint. The tax on real estate for public school purposes for fiscal 2014 was 27.96 mills
(527.96 per $1,000 of assessed valuation) as levied by the Board. Assessed valuations of property
(5113,473,570) are determined by Somerset County and the elected tax collectors are responsible for collection.
The schedule for real estate taxes levied for each fiscal year is as follows:
July I
Julyl-September30
- Levy Date
- 2% Discount Period
- Face Payment Period
- l0% Penalty Period
- Lien Date
October I -November30
December I -December3l
January 15
36
Conemaugh Township Area School DistrÍct
June 30,2014
5.
Taxes Receivable
The elected tax collectors are required to return any uncollected taxes to the county's tax claim bureau by
January 15. It has been determined the amount of outstanding taxes as of June 30, 2014 is $861,301. The
School District, in accordance with accounting principles generally accepted in the United States of America,
recognized the delinquent and unpaid taxes receivable. An allowance for uncollectible taxes was not
est¿blished by the administration. A portion of the amount estimated to be collectible, which was measurable
and available within 60 days, was recognized as revenue and the balance recorded as a deferred inflow
of
resources in the fund financial statements.
Uncollected taxes for the year ended June 30,2014:
s
Realty Transfer Tax
Delinquent Real Estate
4,023
33,088
14,813
Earned Income Taxes
Occupation Taxes
Delinquent Per Capita Tax
Delinquent Occupation Taxes
1,373
2,871
6.417
Uncollected Taxes Recognized
as Revenue (received
Real Estate Taxes
-
62,585
within 60 days)
Deferred Inflow of Resources
Total Taxes Receivable
6.
798"716
$861"301
Unearned Revenues
Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied.
Unearned revenues of$30,999 in the Proprietary Fund represent credits on student cafeteria accounts ($5,952)
and donated commodities inventory on hand (925,047) at June 30,2014.
7.
Due From Other Governments
Amounts due from other governments represent receivables for revenues earned by the School District or
collections made by another governmental unit on behalf of the School District. At June 30, 2014, the
following amounts are due from other govemmental units:
Due From
Federal
State
Local
Proprietar.v Fund
General Fund
$
76,434
231,698
0
96,717
619
0
$30&132
vÆ6
37
June 30, 2014
8.
Capital Assets
Capital asset activity for the fiscal year ended June 30,2014, was as follows:
Beginning
Balance
Additions
Transfers/
Deductions
Ending
Balance
Capital assets, not being depreciated:
Land
46,560 *
$
Total capital assets, not being depreciated
Capiøl assets, being depreciated:
Site improvements
Less accumulated depreciation:
Buildings and improvements
Furniture and equipment
$
146,774
4, 709.894
146,774
(4,663,334)
193,334
*
3,347,332 *
2,843,024
4,663 ,334
20,440,032
88,551
0
3,435,883
3,923,032 *
0
0
3,923,032
12,571,327
Total accumulated depreciation
$12
459,503
*$
459,503
Total capital assets, being depreciated
Less accumulated depreciation:
272,106
Equipment
272,106
Total accumulated depreciation
I
0
0
142,829
0
630,711
0
s 2,447,638
Business-Type Activities
Capital assets, being depreciated:
$
245,796
242,086
187,397
*
0
27,798,947
9,034,341
2,494,926
1,682,771
13,202 ,038
2,300,864 4,663,334
7,63 2.711
Total capital assets, being depreciated, net
46,560
(4,663,334)
8,788,545 *
2,242,840 *
1,539,942 *
Site improvements
Business-type activities capiøl assets, net
$o
20,204,038 2,931,575 4,663,334
Total capital assets, being depreciated
Equipment
0
146,774
12,933,674
Buildings and improvements
Furniture and equipment
Governmental activities capital assets, net
$
4,663,334
14,596,909
$
0
$
14,790,243
$
0
$
459,503
0
0
459,503
31,684
0
303 790
31,684
0
303,790
* $ (31,684) $
0
$
155,713
*Fixed assets and associated accumulated depreciation values were restated as of July 1,2013. See Note 23 to ¡he
financial statements.
38
June 30, 2014
Depreciation expense was charged to functions/programs of the primary government as follows:
:
Instruction
Instruction support
Administration and finance
Operation and maintenance of plant
Student activities
Total depreciation expense
9.
-
governmental
$383,471
27,121
103,437
59,918
35,951
20.8t3
activities
$é30JlL
DefÌned Benefït Pension PIan
Plan Description
The District contributes to a governmental cost-sharing multiple-employer defined benefit pension plan
administered by Pennsylvania Public School Employee's Retirement System (PSERS). Benefit provisions of
the plan are established under the provisions of the Pennsylvania Public School Employees' Retirement Code
(the Code) and may be amended by an act of the Pennsylvania State Legislature. The plan provides retirement
and disability, legislatively mandated ad hoc cost-of-living adjustments, and healthcare insurance premium
assistance to qualifying plan members and beneficiaries. It also provides for refunds of a member's
accumulated contribution upon termination of a member's employment in the public school sector. PSERS
issues a publicly available financial report that includes financial statements and required supplementary
information for the plan. That report may be obtained by writing to Diane J. Wert, Office of Financial
Management, Public School Employees' Retirement System, 5 N. 5th Street, Harrisburg, PA, l7l0l-1905. This
publication is also available on the publications section of the PSERS website at ww\M.psers.state.pa.us.
Fundine Policv
The contribution policy is set by the Code and requires contributions by active members, employers, and the
Commonwealth.
Contribution rates:
Member contributions
-
Active members who joined PSERS prior to July 22, 1983, contribute at 5.25o/o (Membership
Class T-C) or at6.50Yo (Membership Class T-D) of the member's qualifying compensation.
Members who joined PSERS on or after July 22, 1983, and who were active or inactive as of July
l, 2001, contribute at 6.250/o (Membership Class T-C) or at 7 .50%o (Membership Class T-D) of the
member's qualifying compensation.
Members who joined PSERS after June 30,2001 and before July 1,2011, contribute at7.50Yo
(automatic Membership Class T-D). For all new hires and for members who elected Class T-D
membership, the higher contribution rates began with service rendered on or after January 1,2002.
39
June 30, 2014
Members who joined PSERS after June 30,2011, automatically contribute at the Membership
Class T-E rate of 7.50o/o (base rate) of the member's qualifuing compensation. All new hires after
June 30, 201l, who elect Class T-F membership, contribute at 10.30o/o (base rate) of the member's
qualifying compensation. Membership Class T-E and Class T-F are affected by a "shared risk"
provision in Act 120 of 2010 that in future fiscal years could cause the Membership Class T-E
contribution rate to fluctuate between 7.50% and 9.50o/o and Membership Class T-F contribution
rate could fluctuate between 10.30% and 12.30%.
Employer contributions
-
The contribution required of participating employers is based on an actuarial
valuation and is expressed as a percentage ofannual covered payroll during the period for which the amount is
determined. Before July l, 1995, the school district and the Commonwealth shared the employer contribution
rate equally. Since July l, 1995, the school districts are required to pay the entire employer contribution rate
and are reimbursed by the Commonwealth in an amount equal to the Commonwealth's share as determined by
the market valueþersonal income aid ratio (as defined in Act 29 of 1994), which is at least one-half of the total
employer rate. For the fiscal year ended June 30, 2014, the rate of the employer's contribution was 16.93
perc€nt ofcovered payroll. The 16.93 percent rate is composed ofa pension contribution rate of 16.00 percent
for pension benefits and 0.93 percent for healthcare insurance premium assistance. Conemaugh Township Area
School District's contributions to PSERS forthe years ending June 30,2014,2013 and2012were5919,674,
5656,767, and $468,440, respectively. Those amounts are equal to the required contribution for each year.
10. Post-employment Healthcare Benefits
The Public School Employees' Retirement System (PSERS) provides a health insurance premium assistance
program (premium assistance), a post-employment healthcare plan as defined in the Public School Employees'
Retirement Code and amended by Act 29. The program is available to all eligible annuitants who elect to
participate. Under this program, an employer contribution rate for premium assistance was established to
provide reserves in the Health Insurance Account that are sufficient for the payment of premium assistance
benefits.
Participating eligible aruruítants are entitled to receive premium assistance payments equal to the lesser of $100
per month or their monthly insurance premium. In order to receive premium assistance, eligible annuitants
must obtain their health insurance through their employer or the System's Health Options Program (HOP), in
which the system acts as a conduit between the insurance companies and the eligible annuitant.
11.
Postemployment Benefits
From an accrual accounting perspective, the cost of postemployment healthcare benefits, like the cost of
pension benefits, should be associated with the periods in which the cost occurs, rather than in the future year
when it will be paid. In adopting the requirements of GASB Statement No. 45 during the year ended June 30,
2009,the District recognizes the cost of postemployment healthcare in the year when employee services are
received, reports the accumulated liability from prior years, and provides information useful in assessing
potential demands on the District's future cash flows. Because the District adopted the requirements of GASB
Statement No. 45 prospectively, recognition of the liability accumulated from prior years will be phased in over
20 years, commencing with the 2009 liability.
40
June 30, 2014
Plan Description
The District provides continuation of medical and pharmacy benefits to employees who retire from the District.
Further, the District offers retirement cash bonuses. Retirement cash bonuses include $1,500 plus $5O/year of
service.
Elieibility
A.
Teachers and Administrators:
a) Healthcare
Ð
b)
B.
- 30 years of PSERS service, including at least 15 years with the District, and
PSERS retirement eligibility
iÐ AcI ll0/43 - if employee does not meet District incentive requirements
Cash bonus - l5 years of District service and PSERS retirement eligibility
District incentive
Support Staf?Superintendent:
a)
b)
Healthcare - Eligibility for Act ll0l43
Cash Bonus - 15 years of District service and PSERS retirement eligibility
Duration of Healthcare Benefits
Teachers and Administrators eligible for District incentive:
of l0 years or until age 65 or qualification for Medicare if
earlier. Spousal coverage can also be purchased. Spousal coverage ceases with the ccssation of
retiree coverage, or upon spouse's attainment of age 65 or qualification for Medicare if earlier.
Retirees receive coverage for the lesser
Teachers and Administrators eligible for Act
ll0l43
Retirees can purchase coverage until the earlier of age 65 or qualification for Medicare. Spousal
coverage can also be purchased. Spousal coverage ceases with the cessation ofretiree aoverage, or
upon spouse's attainment of age 65 or qualification for Medicare if earlier.
Support Staff:
Retirees can purchase coverage until the earlier of age 65 or qualification for Medicare. Spousal
coverage can also be purchased. Spousal coverage ceases with the cessation ofretiree coverage, or
upon spouse's attainment of age 65 or qualification for Medicare if earlier.
Participant Contributions
A.
Teachers and Administrators:
a)
b)
B.
Eligible for District Incentive
Ð Retiree submits $100 monthly premium assistance to the District and pays any increases in
premium rate post-retirement
Spouse - premium rate
Eligible under Act ll0l43 - premium rate
iÐ
Support StafflSuperintendent
-
premium rate
4t
Conemaugh Township Area School DÍstrict
June 30,2014
All contacts with the District's union employees will
be renegotiated at various times in the future and, thus,
costs and benefits are subject to change.
OPEB benefits are administered by District personnel. No separate financial statements are issued.
The number of participants as of July l,20ll, the effective date of the triennial OPEB valuation, follows. There
have been no significant changes in the number covered or the type ofcoverage since that date.
District
Active employees
106
Retired employees
37
Spouses of retired employees
Total
5
148
Funding Policy
The District currentþ pays for postemployment health care benefits on a pay-as-you-go basis, and
these
financial statements assume that pay-as-you-go frrnding will continue.
Annual Other Postemployment Benefit Cost
For the fiscal year ended June 30,2014, the District's annual OPEB cost (i.e., expense) of $236,517 is equal to
the Annual Required Contribution. Considering the District's annual OPEB cost as well as the payment of
current health insurance premiums, which totaled $239,300, the result was a decrease in the District's Net
OPEB Obligation of $2,783 for the year ended June 30, 2014.
District
Actuarial Accrued Liability (AAL)
Retired employees
$
1,43g,goo
Active employees
Unfunded actuarial accrued liability (UAAL)
Normal cost at beginning of year
Annual covered payroll
UAAL
as
s
s
2,291,300
78,700
16.0439
Amortization factor based on 20 years
o/o
851,500
To be determined
of covered pawoll
To be determined
42
June 30, 2014
District
ARC Normal Cost
$
87,981
Amortization of UAAL
148.s40
Annual required contribution (ARC)
236,521
Interest on Net OPEB Obligation
0
(4)
Adjustment to ARC
Arurual OPEB cost (expense)
236,517
(239,300)
Contribution for the fiscal year
(2,783)
Decrease in Net OPEB Obligation
r34
Net OPEB Obligation June 30, 2013
Net OPEB Asset June 30,2014
$
(2,649)
l0l.l8o/o
Percent ofannual OPEB cost contributed
The District's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB
obligation of the fiscal years ending June 30, 2014,2013 and2012 for the benefits were as follows:
Year
Ar¡rual
Percentage of
OPEB Cost
Net OPEB
Obligation
Ended
OPEB Cost
Contributed
(Asset)
6/3012014 s 236,5t7
101.18%
s
6/3012013 s 228,4s3
109.96%
s
134
613012012 g
r19.30%
$
22,881
22r.s36
Q.649)
Actuarial Methods and Assumptions
Projections ofbenefits for financial reporting purposes are based on the substantive plan (the plan as understood
by the employer and plan members) and include the types of benefits provided at the time of each valuation and
the historical pattern of sharing benefit Çosts between the employer and plan members to that point. Most
included coverages are "community-rated" and annual premiums for communiÍy-rafed coverages were used as a
proxy for claims costs without age adjustment. The unfunded actuarial accrued liability is being amortized over
20 years on a level percent ofpayroll closed basis.
The projection of future benefits for an ongoing plan involves estimates of the value of reported amounts and
assumptions about the probability of occurrencc of future events far into the future. Actuarially determined
amounts are subject to continual revision as actual results are compared with past expectations and new
estimates are made about the future. The actuarial methods and assumptions used include techniques that are
designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the acfuarial value of
assets, consistent with the long-term perspective ofthe calculations.
43
Notes to FinancÍal Statements
June 30, 2014
l, 20ll actuarial valuation, the liabilities were computed using the projected unit credit method and
level percent of payroll amortization. The actuarial assumptions utilized a 4olo discount rate. Because the plan is
unfunded, reference to the general assets, which are short-term in nature (such as money market funds), was
considered in the selection of the 4Yo rate. The valuation assumes a 7.lo/o healthcare cost trend increase for
fiscal year 2014-15, reduced by decrements to a rate of 5.8%by 2027 .
In the July
12. Long-Term Obligations
During the fiscal year ended June 30, 2014, general long-term obligations changed
$
Beginning of year
Additions
Payable
7,915,000
$
1,056,008
0
Less: Original issue discount, net
Long-term liabilities
9,366,504
0
41,932
47 932
11,770,000
(365,000)
0
0
437,428
(36,889)
(r04,332)
0
$ I1,300,669
0
(1,056,008)
0
Less: current portion
$
395,496
$
0
Changes in compensated absences
End ofyear
Long-term
Obligations
Compensated
Absences
4,095,000
(1,296,009)
4,095,000
(240,000)
Principal retirement
follows:
Total General
Other
Long-term
Financins
Bonds
as
12,207,428
(401,889)
(104,332)
0
0$400,539511,701,207
$
The future annual payments required to amortize all outstanding debt and obligations, except for the
compensated absences, as of June 30,2014, including total interest payments are as follows:
General Obligation Bonds
Year Ended
June 30,
2015
2016
2017
2018
2019
2020-2024
2025-2029
2030-2034
2035-2038
$
Total
Principal
Interest
291,110
$
365,000
619,084
405,000
410,000
420,000
425,000
2,250,000
2,555,000
2,985,000
129 104
1,955,000
$_!,672]0
$ 11,770,000
319,627
312,781
304,481
296,681
1,351,528
1,047 ,766
44
$
656,1
l0
724,627
722,781
724,481
721,681
3,601,528
3,602,766
3,604,084
2,084,104
s
16,442 ,162
June 30, 2014
General Oblieation Bonds. Series of 2014
The District issued General Obligation Bonds, Series of 2014, dated June 17, 2014, tn the principal amount of
$4,095,000. The proceeds of the bonds were used to fund various capital improvements to the facilities of the
School District, refund the District's 2006 lease agreement with the Banc of America, and to pay all costs and
expenses incurred by the District in connection with the issuance and sale of these bonds. The bonds bear
interest rates ranging from 0.37Yo to 4.00Yo with annual principal maturities from March 2015 through
September 2035. The balance outstanding at June 30,2014 was 54,095,000.
General Oblieation Bonds. Series of 2012
The District issued General Obligation Bonds, Series of 2012, dated September 26, 2012, in the principal
amount of $8,225,000. The proceeds of the bonds were used to fund certain additions and alterations to the
Conemaugh Township Area Elementary School and other capital projects within the District, and to pay all
costs incidental to the issuance of these bonds. The bonds bea¡ interest rates ranging from 0.600% to 3.625Yo
with annual principal maturities from December 2012 through December 2037. The balance outstanding at
June 30, 2014 was $7,675,000.
Other Long-Term Financing: Enerey Saver Project
In December 2006, the District entered into an agreement with Banc of America Public Capital Corp., a Kansas
corporation, whereby the District purchases ooenergy-saving" equipment from Banc of America. The intent is
that this energy-savings project will save the District $1,567,035 over the next 15 years in utility costs (or
approximately S104,469 annually). The District is financing this project totaling $1,594,067 through Banc of
America aI a rate of 4.01%o with annual payments of $142,092 commencing September 28, 2007 and ending
September 28,2021. The project was finalized in fiscal year 2009. The balance of the financing agreement was
paid in its entirety through the use of the Series of 2014 bond proceeds, resulting in a $0 balance outstanding at
June 30, 2014.
Accumulated Compensated Absences
In accordance with accounting principles generally accepted in the United States of America, the District
accrues liabilities for compensated absences. Compensated absences reflect the potential cost of sick leave
30,2014. The School District allows all employees to accumulate their unused
sick leave. Upon retirement, eligible employees shall receive separation benefits based upon the tot¿l days of
unused sick leave accumulated while in the employ of Conemaugh Township Area School District at the rate of
$40 per day for the first 100 days, $50 per day for days 101-200 and 460 per day for accumulated unused days
in excess of 200. The School District has computed a total liability of $437,428 at June 30,2014 with $405,323
reflected in the general fund and $32,105 reflected in the proprietary fund. Due to the nature of the obligation
for accrued separation benefits, annual requirements to amofüze such obligations are not determinable and have
earned by employees as of June
not been presented.
General obligation bonds and other long-term financing agreements entered into for governmental activity
purposes are liquidated by the general fund. Compensated absences liabilities will be paid by the general fund;
whereas, those related to business-type activities will be paid by the proprietary fund.
45
June 30, 2014
13. Interfund Transactions
Interfund transfers during the year ended June 30,2014 consisted of the following:
Transfer in
Capital Projects Fund (major fund)
General Fund (major fund)
$250,000
0
s250.000
Transfer out
$0
250.000
$250p00
In fiscal year 2014, the District transferred funds to the Capital Projects Fund to assist with capital expenditures
14. Operating Leases
The School District entered into noncancellable operating leases for computers and copiers.
Rental
expenditures under all operating lease agreements were 820,716 for fiscal year 2014. Future minimum rental
payments required under operating leases that have remaining lease terms as of June 30 are as follows:
Year Ended
June 30.
Payment
2015
2016
2017
2018
$19,895
18,374
16,927
16,927
2019
2.821
Total minimum payments
required
VAp44
15. Jointly Governed Organization
The School District governs, with several other school districts, a vocational technical school. Each district is
represented on the vo-tech's school board. However, no on-going financial interest or responsibility exists
between the School District and the vo-tech. The district's tuition expense for its students attending the vo-tech
for fiscal 2014 was 5194,731.
16. Contingent Liabilities
Grant Programs
The School District participates in both state and federally assisted grant programs. These programs are subject
to program compliance audits by the grantors or their representatives. The School District is potentially liable
for any expenditures which may be disallowed pursuant to the term of these grant programs. Management is
not aware of any material items of noncompliance which would result in the disallowance of program
expenditures.
46
June 30, 2014
17. Self Insurance - Medical Insurance
The School District is participating in the insurance consortium with the Greater Johnstown A¡ea Consortium to
provide for the medical care for eligible employees and their dependents. The consortium, which administers
the plan, monitors the school's deposits into the school district trust account to be held for the benefits described
above and Highmark Services, the plan administrator, processes and pays the claims. The consortium limits its
liability by purchasing stop-loss insurance coverage. Conemaugh Township Area School District's liability at
June 30, 2014 for unpaid claims incurred prior to the fiscal year end is not readily determinable. No liability
has been recorded for these claims at June 30,2014 as the District recognizes medical claim expense as claims
are paid.
18. Risk Management
The District is exposed to various risks of loss related to theft of, damage to, and destruction of assets; errors
and omissions; and natural disasters. The District has purchased various insurance policies to safeguard its
assets from risk of loss. Insurance coverage appears to be consistent with previous years. During the year
ended June 30,2014 and the two previous fiscal years, no settlements exceeded insurance coverage.
19. Related Party Transactions
Intermediate Unit Participation
The District is a member of Appalachia Intermediate Unit 8. The District avails itself of various services
provided by this membership including special education, curriculum development, and certain internal service
functions. The total of services provided to Conemaugh Township A¡ea School District for the year ended June
30,2014 for IU8 programs amounted to $298,411. At June 30,2014, the District had a balance due to
Appalachia IU8 of $29,934 for services.
Vocational Technical School Participation
The District is served by the Greater Johnstown Area Vocational-Technical School. Students of the District
have available at the Vocational-Technical School courses and curriculums related to the technical training
fields. Costs of the Vocational-Technical School are shared with other local school districts. Conemaugh
Township Area School District made direct payments totaling 5194,731 for the current year's operations.
20. Economic Dependency
Conemaugh Township Area School District receives approximately 68% of ils revenue from the State of
Pennsylvania in the form of state subsidies. Changes in funding levels by the State could have a material effect
on future operations of the District.
21. Nonmonetary Transactions
The District receives one of its federal program subsidies by means of noncash transfer. The U.S. Departrnent
of Agriculture, through the Pennsylvania Department of Agriculture, provides food commodities under the
National School Lunch Program. These nonmonetary commodity items are valued at market values and
recorded as r€venue as received. The total food commodities donated by the federal government for the fiscal
year 2014 totaled $53,8 17.
47
June 30, 2014
22. Changes in Accounting Principles and Restatement of Net Position
For the year ended June 30, 2014, the District has implemented GASB Statement No. 65, Items Previously
Reported as Assets and Liabilities. This Statement establishes accounting and hnancial reporting standards that
reclassiff, as deferred outflows of resources or deferred inflows of resources, certain items that were previously
reported as assets and liabilities.
In accordance with GASB 65, debt issuance costs, except any portion related to prepaid insurance costs, should
be recognized as an expense in the period incurred. Prior to the implementation of GASB 65, such costs were
deferred and amortized over the life of the debt. This change in accounting principle has resulted in a
restatemcnt (decrease) of the District's net position, effective July l, 2013, in the amount of 5165,442,
representing the unamortized deferred financing costs no longer meeting the definition of an asset.
23. Restatement of Net Position
The net position of the Distriçt was restated effective July l, 2013 to reflect the impact of the change in
accounting principles with the implementation of GASB Statement No. 65, as discussed in Note 22. The
restatement resulted in a decrease in net positionol$165,442.
Net position of the governmental activities was restated effective July l, 2013 Io correçt for overstated capital
assets and accumulated depreciation. This prior year adjustment is reflected on the government-wide financial
statements only, resulting in a decrease in net position of the governmental activities of $520,013 as of July l,
2013.
Net position ofthe business-tlpe activities was restated effective July l, 2013 to correct for overstated capital
assets and accumulated depreciation. This prior year adjustment is reflected on both the fund financial
statements and the government-wide financial statements, with the net effect resulting in an increase in net
position of the business-type activities and proprietary fund of $129,987 as of July 1,2013.
48
Schedule of Revenues, Expenditures and Changes
In Fund Balance - Budget and Actual
General Fund
Actual
(Budgetary
Budgeted Amounts
Original
Final
Basis)
Variance with Final
Budget Favorable
(Unfavorable)
Revenues:
Local sources
$
State sources
Federal sources
3,836,038
8,924,647
284,819
$
3,836,038
8,924,647
$
$
8,951,009
235,058
284,819
13,045,504 13,045,504
Total revenues
4,015,594
179,556
26,362
(49,761)
13,201,661
156,157
457,296
Expenditures:
Instruction:
Regular programs
Special programs
Vocational education programs
Other instructional programs
Nonpublic school programs
5,761,281
5,761,281
1,640,289
308,000
1,640,289
308,000
5,303,985
1,546,008
194,731
67,608
67,608
59,017
8,591
(6,666)
Support services:
Pupil personnel
Instructional staff
6,500
6,500
13,166
42r,200
421,200
202,647
422,060
167,376
35,271
944,751
256,929
9,2r2
202,647
Administration
945,273
945,273
Pupil health
266,141
266,14r
(28,671)
331,821
r,20s,699
767,700
767,700
417,372
2,000
4l'7,3',72
2,000
678,803
30s,362
2,962
415,78t
415,781
401,612
2,500
2,s00
1,400
14,169
1,100
597 092
597,092
596,541
551
13,358,904
13,358,904
12,421,085
937,819
Principal and interest
Excess (deficiency) of revenues
over expenditures
360,492
1,165,890
(313,400) (313,400)
(1,000,000)
(100,000)
(250,000)
Tofal other financing sources (uses)
(1,100,000)
(1,100,000)
(250,000)
Net change in fund balance
(1,413,400)
(1,413,400)
530,576
5,300,000
5,300,000
4,988,123
3,886,600
El]!.,999.
Fund balance, begiruring ofyear
$
3,886,600
$
88,897
I12,010
(e62)
1,093,976
750,000
100,000
0
49
39,809
780,576
(1,000,000)
(100,000)
Fund balance, end ofyear
s22
33t,821
Operation and maintenance of plant
Student transportation
Central
Other support services
Operation of noninstructional services:
Student activities
Community services
Debt service:
Other financing sources (uses)
Interfund fransfers
Budgetary reserve
(860)
1,205,699
Business
Total expenditures
94,281
113,269
850,000
1,943,976
(31t,877)
s
l,632,099
FederaVGrant
Project Title
Pass
Program
Total
Federal
Through
Received
Source
c.F.D.A.
Grantors
Code
Number
Number
Or
Award
Amount
84.010
013-r40094
07 t01/t3-09/30/t4
84.010
013-130094
07/01/12-09/30n3
84.367
84.367
020-140094
07 /01/13-09/30/t4
020-130094
07/0t/12-09/30n3
Grant
Period
Beginning/EndDate
Accrued
(Uneamed)
Accrued
(Uneamed)
Revenueat
For the
Year
July
1.2013
Revenue
Revenue
Recosnized
Expenditures June30.2014
U.S. DEPARTMENT OF EDUCATION
Passed through the Pennsylvania Department
of Education:
ECIATitIeI
ECIATitIeI
ECLA Title II Part
ECIA Title II Part
I
I
I
|
A
A
Total passed through the Pennsylvania Department ofEducation
$
0 $ 1s8,788 $
S 124,202 $
187,703 60,071 34,000 26,07t
$
26,071
47 ,ttt
34,594
0
47 ,ttt
47,ttt
49,325
14,572 t,794
1,79!
450,835 235,233 48,572 233,764 233,764
166,ó96
1s8,788
34,58ó
0
t2,517
0
47,103
Passed through Appalachia Intermediate Unit 08:
IDEAPaTtB-sectionóll
IDEAPaTtB-Section6ll
IDEA - Section 619
IDEA - Section 619
I
I
I
|
07/0U13-09/30n4
/01/t2-09/30/13
84.027
062-140008
84.027
062-130008
07
84.173
84.173
l3l-1300088
l3l-1200088
07
Science
I
84.366
unknown
157,557
0
t84,517
t84,st7
26,960
125,840
t25,840
0
0
0
1,537
1,537
1,537
01/0U13-06/30n4
1,537
0
0
/01/t2-06/30/r3
959
480
480
Subtotal Special Education Cluster
Title II-B Mathematics and
184,517
203,942
07/01113-06/30114
390,955 283,877 126,320 186,054 186,054
0
0
150
150
150
391,105 283,877 126,320 t86,204
Total passed through Intermedicate Unit #8
Total U.S. Dçartment of Education
See accompanying notes to the basic
50
0
28,497
150
186,204
28,647
84t,940 519,110 t74,892 419,968 419,968
75,750
financial statements.
Federal
FederaVGrant
Project Title
Source C.F.D.A.
Code
Number
Pass
Program
Total
Accrued
Accrued
Through
Or
Award
Amount
Received
(Uneamed)
(Uneamed)
Grantors
Grant Period
Number
Beginning/End Date
For the
Year
Revenueat
Julv
1.2013
Revenue
Recosnized
Revenue
Expenditures June30.2014
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Passed through the Pennsylvania Depaftment
of Public Welfare:
Medical Assistance Program - Reimbursement
SBAP Administration
Reimbursement
|
93.778
044-147367 07t01/13-06/30n4 N/A
Total U.S. Department of Health and Human Services
1,294
0
1,294
t,294
0
1,294
0
1,294
r,294
0
U.S. DEPARTMENT OF AGRICULTURE
Passed through the Pennsylvania Department of Agriculture:
National School Lunch - (USDA
Commodities)
Passed through the Pennsylvania Department
Federal
Program
I
10.555 N/A
07/0v13-06/30tr4
(a)
(b)
N/A
53,817
(4,099)
N/A
N/A
201,999
0
206,677
72,843
0
74,882
74,882
314,428
314,428
I
10.555
School Breakfast
I
10.553
N/A
N/A
07
0'7
/0t/13-06130/t4
/01/13-06t30/14
26,168
26,168
340,596
340,596
Subtotal Child Nutrition Cluster
Funds
(d)
(2s,047)
ofEducation:
National School t¡nch
State Matching
(c)
32,869 32,869
328,659
S
N/A
N/A
07101/13-06130/14 N/A
2s,s49
3s4,208
Total U.S. Department of Agriculture
TOTAL FINANCTAL ASSISTANCE
$___q4lp4q
0
(4,099)
4,6',78
(l 8,330)
619
(t7,711)
$__\ryþr2 $_l_2u21 $___?ÉL$q $____zÉLq¡q $____r!p32
See accompanying notes to the basic fìnancial statements.
5l
(4,099)
206,6'17
Notes to Schedule of Expenditures of Federal Awards and Certain State Grants
Note A - Significant Accounting Policies
The accompanying schedule of expenditures of federal awards and certain state grants is prepared on the accrual
basis ofaccounting.
Note B - Donated CommodÍties
Nonmonetary assistance is reported in the schedule at the fair market value of the commodities received and
disbursed. At June 30,2014, the District had food commodities totaling 925,047 in inventory.
(a)
(b)
(c)
(d)
Total amount of commodities received from the Department of Agriculture.
Beginning inventory at July 1,2013.
Total amount of commodities used.
Ending inventory at June 30,2014.
Note C - Direcflndirect Funding
The following source codes reflect program funding:
D
Direct Funding
Indirect Funding
F
Federal Share
State Share
I:
S:
Note D
-
Total Federal Sources reported on the Statement of Revenues,
Expenditures, and Changes in Fund Balances - Governmental Funds
Add: IDEA-B Section 611 passed through, recorded as Local Sources
Add: IDEÄ - Section 619 passed through, recorded as Local Sources
Add: Title II-B passed through, recorded as Local Sources
Total Federal Expenditures
-
-
184,517
1,537
150
42r.262
Governmental Funds
Total Federal Sources reported on Statement ofRevenues,
Expenses, and Changes in Fund Net Position - Proprietary Funds
Tot¿l Federal Expendinres
$235,058
314"428
314.428
Proprietary Fund
Tot¿l Federal Expenditures
$735-690
52
For the Year Ended June 30' 2014
Note E - Test of 507o Rule
$761,858
Total Expenditures
Less:
State's Share ofNational School Lunch
Program and School Breakfast Program
Q6.168\
s735.690
Special Education Cluster
Child Nutrition Cluster
$186,054
314.429
Tested
$500.483
s735,690
53
:
68.00/o
KOTZAN CPA6L
Dennis
ASSOCIATES, P.C.
C¡nïn¡o fusuc Accou¡¡reNrs &
P.
Koøan, CPA, CFF
Brenda A. Pawlowski, CPA, CFE
KimberþA. Dorchal<, CPA, CGFM
MEMBER
BusNpss CoNsti-r:cNTS
AICPA . PICPA
Report on fnternal Control over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Audítíng Snndards
Independent Auditors' Report
West Campus Avenue
We have audited, in accordance with the auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller
General of the United States, the financial statements of the governmental activities, the business-t)æe activities,
each major fund, and the aggregate remaining fund information of Conemaugh Township Area School District as of
and for the year ended June 30,2014, and the related notes to the financial statements, which collectively comprise
Conemaugh Township Area School District's basic financial statements, and have issued our report thereon dated
December 15,2014.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Conemaugh Township Area School
District's internal control over financial reporting (internal control) to determine the audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for
the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we do not
express an opinion on the effectiveness of Conemaugh Township Area School District's internal control.
in internal control exists when the desigrr or operation of a control does not allow management or
employees, in the normal cor¡rse of perforrning their assigned functions, to prevent, or detect and correct
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal
control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will
not be prevented, or detected and corrected on a timely basis. A signifi.cant deficiency is a deficiency, oÍ a
A
defi.ciency
combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to
merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and
was not designed to identiff all deficiencies in internal control that might be material weaknesses or significant
deficiencies. Given these limitations, during our audit we did not identifu any deficiencies in internal control that we
consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assr¡rance about whether Conemaugh Township Area School District's financial
st¿tements are free from material misstatement, we performed tests of its compliance with certain provisions of
laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect
on the determination of financial statement amounts. However, providing an opinion on compliance with those
54
.
334 Budfield Street
,ro-2u, ug 72u. Fo,
'
w6_9
Suite 100
577
'
Johnstown,
PA
75904
provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our
tests disclosed no instances of noncompliance or other matters that are required to be reported under Government
Auditing Standørds.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the
results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on
compliance. This report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the entity's intemal control and compliance. Accordingly, this communication is not
suitable for any other purpose.
.r4o+ar-rC,g¿ì
O.,'^.;l^r:Þ.
Kotzan CPA & Associates, P.C
December 15,2014
55
C'
KOTZAN CPAEL
Dennis P Koøan, CPA, CFF
Brenda A. Pawlowski, CPA,
CFE
ASSOCIATES, P.C.
Kimberþ A. Dorchalq CPA, CGFM
C¡runpo Pu¡ucAcmu¡lreNrs &. Busnws CoNs¡naNrs
MEMBERAICPA,. PICPA
Report on Compliance for Each Maior Federal Program and on
Internal Control Over Compliance Required by OMB Circular A-133
IndePendent Auditors' RePort
Conemaugh Towrship Area School District
West Campus Avenue
Report on Compliance for Each Major Federal Program
'We have audited Conemaugh Township Area School District's compliance with the types of compliance
requirements described nt¡1e OMB Circulør A-133 Compliance Supplementthat couldhave a direct and material
ef|ect on each of Conemaugh Township Area School District's major federal programs for the year ended June 30,
2014. Conemaugh Townshþ Area School District's major federal programs are identified in the summary of
auditors' results section ofthe accorrpanying schedule offindings and questioned costs.
Management's Responsibility
Management is responsible for compliance
applicable to its federal progrims.
with the requirements of laws, regulations, contracts, and grants
Auditors' Responsibility
Our responsibility is to express an opiniòn on compliance for each of Conemaugh Township Area School District's
major federal programs based on our audit of the types of compliance requirements referred to above. We conducted
our audit of cãmpüance in accordance with auditing standards generally accepted in the United States of America;
the st¿ndards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller
General of the Uoite¿ States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations. Those standards and OMB Circular A-133 require that we plan and perform the ar¡dit to obtain
reaionable assurance about whether noncompliance with the types of compliance requirements referred to above that
could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test
basis, evidence about Conemaugh Township Area School District's compliance with those requirements and
perforrning such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program.
However, our audit does not provide a legal determination of Conemaugh Township Area School District's
compliance.
Opinion on Each Major Federal Program
respects, with the rypes of
compliance requirements ieferred to above that could have a direct and material effect on each of its major federal
In our opinion, Conemaugh Township Area School District complied, in all material
prograrns for the year ended June 30,20t4.
56
. 334 Budfield Street '
Suite 100
8L4-266-9577
874-269-4912'
www.kotzancpa.com
Fa¡<:
'
Johnstown,
PA
75904
Report on Internal Control Over Compliance
Management of Conemaugh Township Area School District is responsible for establishing and maintaining effective
internal control over compliance with the types of compliance requirements referred to above. In planning and
performing our audit of compliance, we considered Conemaugh Township Area School District's internal control
over compliance with the types of requirements that could have a direct and material effect on each major federal
program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing
an opinion on compliance for each major federal program and to test and report on internal control over compliance
in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of
internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Conemaugh
Township Area School District's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance
does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A
material wealcness in internal control over compliance is a deficiency, or combination of deficiencies, in internal
control over compliance, such that there is a reasonable possibility that material noncompliance with a type of
compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A
significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal
control over compliance with a type of compliance requirement of a federal program that is less severe than a
material weakness in internal control over compliance, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph
of
this section and was not designed to identify all deficiencies in internal control over compliance that might be
material weaknesses or significant deficiencies. V/e did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been
identified.
Purpose of This Report
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal
control over compliance and the results of that testing based on the requirements
Accordingly, this report is not suitable for any other purpose.
of OMB Circular A-133.
'
a--\
¿("u.¡*.,gQ-!r C\¡^oc-r'c'k-'r'' ç C
rcotzblcPe & Associates, P.C.
December 15,2014
57
Schedule of Findings and Questioned Costs
Section
I - Summary of Auditors'Results
Financial Statements
Type of auditors' report issued:
unmodified
Internal control over financial reporting:
Material weakness(es) identified?
Signifi cant deficiency identified not
considered to be material weaknesses?
Noncompliance material to financial statements noted?
Yes
XNo
Yes
X
Yes
XNo
Yes
XNo
None reported
Federal Awards
Internal control over major programs:
Material weakness(es) identified?
Significant deficiency identified not
considered to be material weakness(es)?
_Y"r
X
None reported
X
No
Tlpe of auditors'report issued on
compliance for major programs:
unmodiJìed
Any audit findings disclosed that are required
to be reported in accordance with Circular
A-l33,Section .5 10(a)?
Yes
Identification of major programs:
Name of Federal Program or Cluster
CFDANumber(s)
Special Education Cluster
84.027,84.173
10.553, 10.555
Child Nutrition Cluster
Dollar threshold used to distinguish
between Type A and Type B programs:
Auditee qualified as low-risk
Section
II - Financial
Section
III -
$300,000
Yes
auditee?
X
Statement Findings No Findings
Federal Award Findings and Questioned Costs No Findings or Questioned Costs
58
No

Conemaugh Township Area School District Davidsville

Transcription

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