Jersey Shore Area School District Expenditures Per Student ...

Jersey Shore Area School District Expenditures Per Student ...

Jersey Shore Area School District A Presentation of 2017 Audit Results to the Board of Directors 1 John W. Compton, Jr., CPA, CGFM Partner Public Sector Group Joseph ONeill, CPA Senior Manager Public Sector Group 2

Executive Summary Unmodified (i.e., clean) opinion on the financial statements... Unmodified opinion on compliance as related to the Districts major federal award program; No findings related to federal programs General Fund fund balance decreased $455K; was anticipated in the 2017 budget and remains within recommended guidelines 3 Required Communications Pursuant to Clarified Audit Standards Codification Section 260 (AU-C 260)

Baker Tilly refers to Baker Tilly Virchow Krause, LLP, an independently owned and managed member of Baker Tilly International 2010 Baker Tilly Virchow Krause, LLP 4 Jersey Shore Area School District Required Communications (AU-C 260) Our responsibility under generally accepted auditing standards: o To express an opinion on the financial statements, based on our audit; o Audit procedures were designed to gain reasonable, but not absolute assurance; o Our review of internal control is limited to gaining a basic understanding of internal control in order to design an effective audit approach not for the purpose of providing

assurance on internal control. 5 Jersey Shore Area School District Required Communications (AU-C 260) Accounting Estimates o Are an integral part of the financial statements prepared by management actual results may differ significantly from managements current judgments. The more significant estimates are as follows: oTaxes Receivable within the General Fund, and the related allowance for doubtful collections; oOther postemployment benefits liability; oNet pension liability; oLiability for compensated absences, and; oEstimated useful lives of property and equipment.

6 Jersey Shore Area School District Required Communications (AU-C 260) Audit Adjustments o We are required to report to you the more significant audit adjustments posted in connection with our audit. o We proposed a small number of adjusting journal entries, none of which had a significant impact on your external financial reporting process. 7 Jersey Shore Area School District Required Communications (AU-C 260) There is nothing to report with regard to

the following: o Disagreements with management; o Consultation of management with other accountants; o Major issues discussed prior to our retention, and; o Difficulties encountered in performing the audit. 8 What Type of Audit Was Done? A special type of financial statement audit was conducted known as a Single Audit Federal law requires a Single Audit in situations where a government expends > $750,000 in federal financial assistance in any given year A Single Audit involves both financial

statement and compliance auditing 9 What Did the Audit Report Say? We give two opinions in the audit Page 2, 1st paragraph an unmodified opinion on the financial statements... Page 65, 1st paragraph - an unmodified opinion on District compliance with requirements applicable to your major federal award program (Special Education Cluster) 10 Financial Statement Analysis 11

Budget Vs. Actual at June 30, 2017 Appears on page 23 of Single Audit Actual revenues and other financing sources were $106,270 (0.27%) more than final budget Actual expenditures and other financing uses were $111,241 (0.27%) more than final budget Overall, budgeting was precise and the integrity of the process was maintained for 2017 12 Analysis - General Fund Balance See page 19 of GPFS At June 30, 2017, the fund balance in the General

Fund was $6,341,583 This represents ~ 15.21% of the $41.7M G/F budgeted expenditures for FYE 6.30.18, which is slightly below recommended (GFOA) guidelines. GFOA recommends two months worth of operating expenditures (2 months of operating expenditures = $6.9 million or ~ 16.7%) $4,080,000 of the $6,341,583 is committed for future PSERS and health care increases 13 General Fund fund balance Total Fund Balance $7,000,000 $6,000,000 $5,000,000

$4,000,000 $3,000,000 $2,000,000 $1,000,000 $- At 6.30.17, the District is slightly below GFOA guideline s

Assets Liabilities = Fund Balance (15.21% vs 16.67% 2010 2011 2012 2013 2014 2015 2016 2017 14

Historical Information, 2013-2017 15 General Fund Revenues By Source $25,000,000 $20,000,000 $15,000,000 Local State Federal $10,000,000

$5,000,000 $2013 2014 2015 2016 2017 16 Instruction" includes regular, special, vocational, adult and other instructional programs (teacher salaries, benefits, supplies, etc.)

General Fund Expenditures By Type Support Services include pupil personnel, instructional staff, administration, business office, O&M of plant, transportation, etc. 30,000,000 25,000,000 20,000,000 Instruction Non-instructional

15,000,000 Support Services Debt Service Net Transfers 10,000,000 5,000,000 2013 2014 2015 2016 2017

17 Long-term Debt $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 Long Term Debt $20,000,000 $15,000,000 $10,000,000 $5,000,000 $2013 2014

2015 2016 2017 18 Uniform Guidance Compliance Schedule of Expenditures of Federal Awards appears on page 60 of the Single Audit. In total, the District expended $1,895,929 in federal financial assistance during fiscal 2017. Consistent with 2016, we did not identify any findings related to the federal programs. 19

PSERS Retirement Contribution Rates PSERS Retirement Contribution Rate Increases PSERS employer contribution rates are expected to continue to increase over the next several years. The chart below displays fiscal year 16/17 actual figures as well as projected annual increases over the next 5 years. Fiscal Year Ending June Total Projected Employer Contribution Rate % Total Projected Covered Payroll (assumes 2% annual increase)

Projected Employer Contributions 16/17 30.03 17,398,328 5,224,718 17/18 32.04 17,495,676 5,685,913

18/19 33.27 17,845,590 6,022,276 19/20 34.20 18,202,502 6,314,430 20/21 33.51

18,566,552 6,310,774 21/22 33.51 18,566,552 6,436,990 20 On the Horizon GASB 75 GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than

Pensions Will require the District to record their entire Unfunded Actuarially Accrued Liability ($8,293,248 as of the Districts most recent actuarial 1/1/2016 valuation). Effective for the Districts June 30, 2018 financial statements. 21 Summary... Districts General Fund fund balance is reasonably in line with the GFOA recommended guidelines. Internal controls are in place and no material weaknesses were noted. Successful transition of fiscal management team; Business Office is very solid and does

a very good job with bookkeeping. 22 Questions??? John Compton Joe ONeill Baker Tilly Virchow Krause, LLP 1000 Commerce Park Drive, Suite 430, Williamsport 570.323.6023 [email protected] [email protected] 23

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